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A  HISTORY  OF 


'X 


I? 

MONEY  AND  PRICES 


AN  INQUIRY  INTO  THEIR  RELATIONS  FROM 
THE  THIRTEENTH  CENTURY  TO  THE  PRESENT  TIME 


J.    SCHOENHOF 
// 

AUTHOR   OF    "THE   ECONOMY    OF   HIGH   WAGES,      ETC. 


Die  Leute  glauben  deshalb  an  das  Wahre  so  wenig,  weil  das  Wahre  so  einfach  ist. 
(People  are  so  little  inclined  to  believe  in  the  truth,  because  the  truth  is  so  simple.) 

GOETHE. 


G.  P.  PUTNAM'S  SONS 

NEW  YORK  LONDON 

27  WEST  TWENTY-THIRD  STREET  24  BEDFORD  STREET,  STRAND 

£hc    \\nichtrbochrr    press 
1896 


COPYRIGHT,  1896 

BY 

G.  P.  PUTNAM'S  SONS 
Entered  at  Stationers'  Hall,  London 


Ube  ftnicfcerbocfcet  press,  flew  IRocbelle,  H. 


UNIVERSITY  OF  SOUTHERN  CALIFORNIA  LIBRAE 


PREFACE. 

IN  the  years  1869  and  1870  I  contributed  a  series  of 
articles  on  The  Labor  Question  to  a  German  periodical, 
then  published  in  New  York,  under  the  title,  Die  Neue  Zeit. 
In  these  articles  I  held  that  prices  were  to  be  considered  not 
as  simple  units,  but  as  results  of  all  the  factors  involved  in 
the  processes  of  production  and  distribution,  including  the 
action  of  government  in  the  exercise  of  its  political  preroga- 
tive. I  held,  further,  that  the  wage-earners'  well-being,  and 
that  of  all  people  with  small  incomes,  depends  on  the 
extent  in  which  the  profit-charges  on  the  several  price-ele- 
ments contribute  towards  swelling  prices.  Feudal  preroga- 
tives, privileges,  monopolies  of  all  sorts,  protective  duties, 
and  taxes  upon  production,  as  well  as  all  infringements  of 
the  exercise  of  the  fullest  measure  of  individual  freedom, 
fell  under  this  ban  as  a  matter  of  course.  I  held  that  the 
preferences  conveyed  under  these  titles,  either  as  inherited 
rights  transmitted  from  a  passing  state  of  society,  or  as 
the  acts  of  legislation  for  the  furthering  of  special  inter- 
ests, raise  values  beyond  the  compensation  received  by 
the  classes  engaged  in  production  and  distribution,  and 
thereby  operate  to  depress  the  working  classes ;  and  that 
it  must,  therefore,  be  the  aim  of  enlightened  statesman- 
ship to  remove  them,  or  reduce  them  to  the  smallest 
possible  dimensions. 

An  analysis  of  prices  necessarily  involves,  therefore,  the 
examination  of  all  the  elements  of  price-making,  and 


IV  PREFACE. 

these  include,  practically,  all  the  economic,  political, 
social,  and  ethical  forces  of  the  age. 

As  subjects  of  my  analysis  I  treated  the  conditions  of 
agriculture,  mining,  and  industry,  whether  free  or  saddled 
with  hereditary  burdens,  and  other  charges  contributing 
to  price-making,  under  the  headings  of 

Wages, 

Profit-rates, 

Expense  of  distribution, 

Taxation  and  tariffs, 

Interest  and  capital, 

Transportation, 

Monopolies,  and 

Currency. 

The  views  on  prices  and  the  cost  of  production  which  I 
held  then,  and  which  I  have  briefly  stated  above,  have 
been  confirmed  by  the  varied  studies  which  I  had  excep- 
tional opportunities  to  pursue  in  my  business  career  and 
under  a  special  appointment  of  the  Secretary  of  State, 
Mr.  Bayard. 

In  1885  I  gave  expression  to  the  same  ideas  in  my  book, 
The  Industrial  Situation.  The  question  of  "  the  appre- 
ciation of  gold  "  and  "  the  depreciation  of  silver "  had 
then  begun  to  be  agitated.  The  decline  of  prices  was 
by  writers  of  international  fame  attributed  to  resulting 
monetary  changes.  I  contradicted  this  theory,  and  gave 
expression  to  the  views  already  stated.  In  my  earlier 
opinions  I  was  still  under  the  influence  of  the  theory  that 
the  money-quantities  in  circulation  affect  prices.  From 
this  theory  I  had  emancipated  myself  by  1885.  I  stated 
that  prices  were  of  the  composite  nature  illustrated,  and 
that  the  quantities  of  gold  and  silver  in  circulation  had 
little  to  do  with  this  rise  and  fall. 


PREFACE.  V 

As  was  to  be  expected,  my  position  was  severely  criti- 
cized. It  was  so  radically  opposed  to  the  tenets  of  ortho- 
dox political  economy  that  it  reeded  more  than  even  the 
broadest  and  firmest  foundation  of  general  facts  to  prove 
its  correctness  and  have  it  take  the  place  of  the  old,  time- 
honored  belief. 

The  acute  phase  into  which  the  question  has  since 
entered  has  caused  me  tto  examine  the  prices  of  the 
period  anterior  to  the  discovery  of  the  American  silver 
mines,  and  to  carry  the  comparison  down  to  the  present 
time,  for  the  purpose  of  determining  by  this  exact  pro- 
cess whether  prices  have  actually  risen  with  the  vast 
increase  in  the  money  stocks  of  the  world. 

A  careful  examination  of  German,  French,  and  Eng- 
glish  records  from  the  thirteenth  century  to  the  present 
day  has  brought  to  light  an  overwhelming  array  of  facts 
in  support  of  my  views. 

The  data  furnished  by  each  country  corroborating  the 
data  furnished  by  the  others,  all  doubt  of  the  correctness 
of  the  conclusions  to  be  derived  from  them  is  removed, 
and  I  am  enabled  therefore  to  demonstrate  in  the  present 
volume : 

That  prices  of  commodities  move  in  obedience  to 
natural  and  inherent  causes,  independent  of  circulating 
money  quantities. 

What  these  causes  are,  and  how  they  operate  on  prices, 
is  fully  set  forth  in  the  third  part  of  this  treatise. 

The  demonstration  that  price  increase  brought  about 
by  the  issue  of  depreciated  currency,  or  other  inflating 
causes,  has  always  acted  detrimentally  to  the  interests  of 
the  working  classes  has  an  important  bearing  on  the  labor 
question.  The  rise  in  prices  of  grain  in  the  three  coun- 
tries, dating  from  the  middle  of  the  sixteenth  century, 


VI  PREFACE. 

the  causes  of  which  are  fully  explained,  brought  no  cor- 
responding increase  in  wages.  The  deterioration  of  the 
condition  of  the  poor  is  directly  traceable  to  this  in- 
disputable fact.  All  commodities  excepting  grain  have 
suffered  most  remarkable  declines  since  the  time  of 
smallest  money  supply,  from  which  my  examination 
starts. 

In  Appendix  A  I  have  summarized  the  price  history 
of  grain  for  the  three  countries,  and  brought  prices  and 
wage  rates  in  comparison,  to  illustrate  the  deterioration 
of  the  condition  of  the  working  classes  by  the  quantity  of 
grain  purchasable  by  the  day's  wage  of  a  carpenter  or  a 
mason  from  the  middle  of  the  fourteenth  century  to  the 
year  1882. 

The  workingman's  condition  has  been  one  of  degrada- 
tion from  the  time  of  the  rise  in  grain  prices  mentioned 
above.  It  begins  to  improve  only  with  the  technical 
and  scientific  progress  of  our  time,  and  it  is  proved  that 
the  well-being  of  the  poorer  classes  is  closely  interwoven 
with  cheapness  of  commodities. 

In  Appendix  B  the  leading  views  are  given,  which  I 
gathered  in  an  inquiry  into  the  economy  of  production 
and  the  state  of  technical  education  in  Europe,  under- 
taken under  the  auspices  of  the  Department  of  State  in 
1887.  The  statement  is  the  preface  to  a  report  to  the 
Secretary  of  State,  and  was  separately  published  under 
the  title  Influences  Bearing  on  Production.  As  the  data 
contained  in  its  pages  bear  directly  on  the  present  inquiry, 
and  are  frequently  referred  to  in  the  third  part,  devoted 
to  the  subject  "  of  price-making  causes,"  I  have  considered 
it  advisable  to  reproduce  the  matter  at  the  end  of  this 
volume. 

NEW  YORK,  December,  1895. 


CONTENTS. 


FIRST  PART. 

PACK 

A    CRITICAL    REVIEW    OF    PRICE    THEORIES    AND 

MONETARY  CONDITIONS 3-68 

CHAPTER  I. 

THE  ERRONEOUS  PREMISES  UPON  WHICH  OUR  PRICE 

THEORIES  REST 3~l8 

The  basis  upon  which  the  present  agitation  rests.  Statistics  and 
"  Index  Numbers."  What  makes  them  unreliable.  Violently 
diverging  price  quotations  footing  up  in  equal  totals.  Falling 
and  rising  prices  produce  equal  totals.  Present  price  average 
equal  to  average  of  1845-1850.  Rise  and  fall  traceable  to 
natural  causes.  War  periods  and  consequent  high  prices  from 
1853  to  1857,  and  from  1863  to  1875.  Reaction  and  general 
trade  depression  1875  and  1879  lower  prices  ....  3—16 

Wages  have  risen  materially  only  in  gold-paying  countries  under 
constantly  declining  prices  of  the  products  cf  these  countries. 
Price  of  cotton  same  in  1854  as  in  1889.  Great  price  reduction 
in  finished  product  ........  16—  iS 

CHAPTER   II. 

THE  PREVAILING  MONEY  THEORIES.  THE  MONEY  MET- 
ALS. THE  VARYING  RELATIONS  OF  OUTPUT  DOES 
NOT  AFFECT  VALUE  RELATIONS IQ-44 

No  trace  found  in  modern  history  that  sudden  increase  raised  or 
sudden  decrease  lowered  prices.  Resumption  of  specie  pay- 
ment  in  America  adds  over  60  per  cent,  to  circulation  in  1879 
to  1882.  Increase  does  not  stem  tide  of  declining  prices 

even 19-26 

vii 


viii  CONTENTS. 

PAGE 

The  output  of  gold  and  silver  examined  from  1492  to  1894. 
Average  of  quantity-relations  :  45  silver  to  i  gold  up  to  1850 
maintains  high  value  ratio  of  15.50  to  I.  The  output  of  the 
1851  to  1870  period  violently  changes  relation.  Does  not 
affect  value.  Real  cause  of  decline  in  price  of  silver  not  in 
the  cost,  or  quantity  of  output,  but  in  the  use  as  a  money  metal. 
Great  increase  in  gold  production.  Gold  the  money  of  ad- 
vancing civilizations.  Silver  in  the  past  almost  exclusively  the 
money.  Cause  of  its  high  value  in  undeveloped  periods.  The 
extraordinary  yields  of  the  gold  mines.  New  modes  of  gold 
mining.  Application  of  capital  and  science  ....  26-34 

The  Standards  of  Value  of  Different  Epochs.  The  low  commodity 
value  of  early  moneys.  Purchasing  power  due  to  limited 
coinage.  Silver  money  now  commodity  money.  Reasons. 
States  rising  to  power  always  adopted  gold  standard.  Signs 
of  ripeness  and  trading  expansion.  The  gold  coins  kept  their 
purity  and  weight  while  debasing  of  silver  brought  silver  money 
to  a  hundredth  part  of  its  original  device  in  some  of  the  coin- 
ages. Florentines,  the  bankers  of  Europe,  the  same  as  the 
"  gold  florin  "  the  standard  of  payment.  German  cities  in  the 
fifteenth  century  make  bills  of  exchange  payable  in  gold  .  35—44 

CHAPTER  III. 

THE  DEMONETIZATION  OF  SILVER  A  RESULT  OF  ECO- 
NOMIC DEVELOPMENT 45~68 

The  silver  product  of  the  world.  Low  cost  of  production  for  the 
last  dozen  years.  Output  increasing  rapidly  in  spite  of  de- 
clining commercial  value.  The  value  of  money  metals  de- 
termined by  their  usefulness  in  the  currencies  of  the  world  .  45-5  5 

Credit  money.  When  taking  the  place  of  metal  money.  Why  the 
Jews  were  early  organizers  of  credit  payments.  Drafts  and 
transferable  due  bills  amongst  the  oldest  institutions  of  civil- 
ized commerce.  Why  large  money  payments  were  impossible. 
The  fairs.  Methods  of  clearing  accounts.  Early  practice  at 
fairs.  The  frequent  debasement  of  the  coins  made  payment 
by  weight  a  necessity.  An  established  fact  all  through  the 
Middle  Ages.  The  money  of  account.  The  true  standard  of 
prices.  The  bank  of  Venice,  created  in  1171,  organizes  and 
pays  in  bank  credits.  Followed  by  Florence  and  by  the  com- 
mercial free  towns  of  the  Empire  ......  56-68 


CONTENTS.  IX 

SECOND    PART. 

PAGE 

THE  HISTORY  OF  PRICES  FROM  THE  MIDDLE  AGES 

TO  THE  PRESENT  TIME '     .     71-212 

CHAPTER  IV. 

THE  ECONOMIC  DEVELOPMENT  OF  THE  MODERN  STATES. 
THE  RISING  PRICES  AND  EXPANDING  TRADE  IN  GER- 
MANY PRECEDING  THE  AMERICAN  INFLUX  OF  SILVER  71-86 

Rise  of  prices  in  Germany  in  the  last  quarter  of  the  fifteenth  and 
in  the  first  quarter  of  the  sixteenth  centuries.  The  large 
trading  companies.  The  strength  of  the  money  power.  The 
enormous  profits  and  capital  accumulations.  The  wealth  of 
the  Ntirnberg  and  Augsburg  merchants.  All  happening  prior 
to  the  discovery  of  the  American  silver  mines  of  Potosi  and 
Guanajuato.  General  breakdown  of  Germany's  economic 
greatness  about  the  time  of  American  silver  finds;  Exagger- 
ation of  account  of  silver  production  in  Germany  and  of 
American  supply  prior  to  the  second  half  of  sixteenth  century. 
Small  amount  of  money  in  circulation.  Great  amount  stored 
away  in  silver  plate.  Scarcity  of  money  did  not  prevent  rise 
of  prices.  Rise  in  foreign  produce  due  to  altered  route  to 
India.  Effect  in  Germany,  monopolizing  tendencies.  Former 
conditions  favored  small  traders  ......  71-81 

Rise  of  prices  due  to  change  from  feudal  agricultural  to  modern 
industrial  conditions.  Productive  methods  little  changed. 
Same  experience  in  Italian  cities  in  thirteenth  and  fourteenth 
centuries.  Complaint  of  German  merchants  of  high  cost  of 
living  in  Venice.  Italy  early  example  of  advanced  mode  of 
trading 81-86 

CHAPTEJR.  V. 

DISTINCTIONS  TO  BE  OBSERVED  IN  MAKING  COMPARI- 
SONS OF  PRICES  IN  DIFFERENT  PERIODS  .  .  .  87-111 

1.  The  Economic  Positions.     The  earlier  periods.     Barter  and  pay- 

ment in  kind  ..........       88-90 

2.  The  Nature  of  the  Money  under  -which  Price  Quotations  are 

Noted.    The  early  price  quotations  in  present  denominations. 
The  variations  and  the  gradual  deterioration  a  source  of  revenue. 


X  CONTENTS. 

FAGS 

But  marks  also  an  economic  progress  and  shows  forward  step 
to  money  economy.  The  pound  of  silver  the  actual  basis. 
First  steps  of  recovery  from  dishonest  coins  by  commercial 
towns  of  the  Rhine.  Cologne,  the  mark  silver,  and  its  honest 
coinage  the  basis  of  its  commercial  ascendency.  France,  chaos 
as  great  as  in  Germany.  Debasement  by  the  Valois  kings. 
The  English  coinage.  Strength  of  the  crown  keeps  coinage  in 
hand  and  preserves  full  value.  Debasement  by  Henry  VIII. 
Effect  on  prices  not  great,  because  of  payment  by  weight  of 
silver.  Sad  effect,  however,  on  condition  of  working  classes. 
Elizabeth's  reform  of  the  coinage.  Value  of  new  coin  I  to  3 
of  full  value  of  earlier  coins  .  90-101 

3.  The  Different  Relation   of  Commodities  in   Different    Price 

Periods.  High  prices  of  all  commodities  pertaining  to  manu- 
facturing industries.  A  few  price  quotations  from  the  eleventh 
and  twelfth  centuries  in  coins  of  the  time  and  value  of  to-day. 
High  prices  of  cloths,  linen,  iron,  metals.  Absence  of  inter- 
communication depresses  prices  of  animals.  Effect  of  union 
with  England  raising  prices  of  Highland  cattle.  Low  price  of 
meat  and  high  price  of  corn  proof  of  backwardness  of  agri- 
culture. Modern  grazing  countries  offer  same  phenomena  as 
Europe  in  Middle  Ages.  The  hide,  the  tallow,  the  wool,  the 
only  commercial  value  in  certain  stages  of  development.  Prices 
at  present  in  grazing  states  much  lower  than  in  Germany  in 
twelfth  century 101-109 

4.  The  Changed  Character  of  Commodities  in  Progressing  Periods. 

The  character  of  commodities  has  improved  considerably 
since  early  periods  under  discussion.  The  weight  of  animals. 
The  improvement  of  breeds  .......  109-1  n 

CHAPTER  VI. 

ENGLISH  PRICE  HISTORY  FROM  1261  A.D.  TO   1580    .          .    II2-I33 

Evidence  that  money  dealings  and  price  quotations  are  by  weight 
and  not  by  tale.  Uniformity  of  prices  under  progressing  deteri- 
orations from  1261  to  1540  in  average  prices  further  proof. 
Extreme  price  variations  between  years  of  plenty  and  scarcity. 
Analogy  in  Russia  of  to  day.  Price  period  1261  to  1400  and 
of  1401  to  1540  compared  in  the  old  prices  and  in  the  equiva- 
lents of  the  new  coinage  .......  II2-IIQ 


CONTENTS.  xi 

PAGE 

I.  Prices  of  wheat,  barley,  oats,  rye,  malt,  beans,  and  peas. 
Showing  no  rise  over  first  two  periods  expressed  in  equivalent 
money  relations.  Rather  lower.  2.  Price  of  live  stock  not 
changed  in  300  years.  On  basis  of  weight  of  animals,  differ- 
ence between  1450  and  1850  but  i  to  2 119-123 

3.  Farm  produce.  High  price  of  wool  in  earlier  period.  Lower  at 
end  of  sixteenth  century.  Farm  produce  dearer,  greater  de- 
mand in  towns.  Lowering  in  prices  of  building  materials, 
iron,  and  metals.  Causes  of  decline.  Wages  high  from  time 
of  plague  to  Henry  VIII.  Not  risen  in  proportion  with 
change  of  money.  Workingmen  never  recovered  old  position 
before  debasement  of  the  coins.  No  change  in  methods  in 
handicrafts  nor  improvement  in  agriculture  make  prices 
stationary  in  industrial,  and  with  increasing  population  higher 
in  agricultural,  products.  Higher  prices  of  southern  and 
eastern  produce.  Reasons  .......  123-133 


CHAPTER  VII. 

I 

PRICE  PERIOD   1582  TO  1702  CONSIDERED  ....    134-147 

The  financial  condition  of  England  inferior  in  every  way.  Small 
amount  of  circulation.  Slow  increase  during  seventeenth 
century  from  time  of  Elizabeth.  Imports  and  exports.  Slow 
development  of  commerce.  No  possible  cause  of  high  prices 
in  money  quantity  therefore.  Comparing  average  prices  of 
140  years  (1400  to  1540)  period  with  prices  of  seventeenth 
century  in  equivalent  money.  Great  rise  in  cereals  beginning 
with  the  years  1592  to  1602,  to  end  of  seventeenth  century 
prices  two  to  three  times  as  high  as  in  1580.  Causes,  bad 
seasons,  increasing  population,  and  backward  state  of  agricul- 
ture. England  importing  grain.  Authorities  .  .  .  134-138 

Prices  of  animals  doubled  over  fifteenth  century.  Meat  not  much 
increased  proves  increasing  weight  of  animals  in  seventeenth 
centuries.  Wool  same  as  in  fifteenth  and  sixteenth  centuries. 
Due  to  extended  sheep  farming  over  tillage.  Explains  high 
corn  prices.  Prices  of  building  materials  nearly  the  same  as 
in  fifteenth  century.  Iron  and  metals  somewhat  lower  thaji  in 
fifteenth  and  sixteenth  centuries,  and  change  very  little  all 


Xil  CONTENTS. 

through  seventeenth  century.  Rise  in  wages  from  time  of  Com- 
monwealth is  followed  by  proportionate  rise  in  prices  of  some 
of  the  industrial  products.  Dismal  position  when  wages  of 
two  epochs  are  compared  with  relative  corn  prices.  Prices  of 
textile  fabrics.  No  rise  but  rather  lowering  tendency  apparent. 
Little  change  yet  in  character  of  manufactures  or  in  technical 
methods.  High  prices  of  foreign  commodities  still  prevailing. 
But  become  lower  towards  end  of  century  .... 

CHAPTER    VIII. 

PRICES   OF    EIGHTEENTH    CENTURY    DOWN    TO    PRESENT 

TIME : 148-173 

Commerce  of  England  in  seventeenth  century.  Changing  con- 
ditions under  William  III.  Heavy  growth  of  foreign  trade, 
increasing  revenues  and  increasing  circulation.  Banking 
facilities  totally  absent  under  preceding  reigns.  Now  become 
part  of  trade.  Plate  comes  out  more  from  the  strongboxes  and 
forms  part  of  money  stocks.  Increased  output  of  gold  and 
silver  over  seventeenth  century  throughout  eighteenth.  Eng- 
land's rising  power.  Commercial  and  financial.  Declining 
prices  in  wheat  follow.  Same  in  France.  England  exports 
corn,  while  previously  importing.  Improvements  in  agricul- 
ture and  good  seasons,  despite  growing  population,  reduce 
prices.  High  prices  during  French  war.  Great  suffering  of 
working  classes.  Insufficient  rise  in  wages  to  cover  difference. 
Comparisons  by  periods.  High  prices  in  the  first  half  of  nine- 
teenth century.  Getting  lower  with  increase  of  money  supply 
from  new  gold  discoveries.  Enormous  increase  of  money  fol- 
lowed by  decrease  in  prices.  Recent  prices  ....  147-161 

Prices  of  live  stock,  meat,  and  farm  products.  Do  not  rise  in 
proportion  with  corn.  Nor  fall  in  proportion.  Reasons. 
Comparing  English  prices  of  meat  from  1593  to  1893.  Rise 
not  very  marked  to  end  of  eighteenth  century.  Same  showing 
for  butter  and  cheese.  Reasons.  Steadiness  of  price  of  English 
wool  up  to  end  of  eighteenth  century.  Rise  of  price  beginning 
with  1845.  Rise  up  to  1877.  Decline  since.  Extraordinary 
expansion  of  wool  supply.  Prices  of  Australian  decline  from 
highest  point  in  1872  to  1875.  But  not  lower  in  1885  than  in 
1846  to  1855  .  .  . 161-167 


CONTENTS.  xiii 

PACK 

Prices  of  English  pig  iron,  finished  iron,  copper,  and  lead  com- 
pared from  1693  to  1702  down  to  1893  to  1894.  Steadiness  of 
price  up  to  1838,  excepting  war  periods.  Great  decline  in  iron 
prices  following  that  time.  Great  decline  in  manufactured 
articles.  Cloth  and  linen  prices  of  seventeenth  century  and 
present  time.  Extraordinary  decline  in  sugar,  spices,  rice,  etc.  168—173 

CHAPTER  IX. 

THE    PRICE    HISTORY    OF    FRANCE    FROM     I2OI     A.D.    TO 

1890 174-212 

The  chaotic  state  of  French  currencies.  The  various  standards 
and  varying  values  of  the  coins  at  different  periods.  Corrobo- 
rations  of  facts  adduced  in  preceding  chapters  of  uniformity  of 
price-level  and  that  payments  were  made  on  basis  of  weight 
instead  of  tale  in  recent  work  of  Mr.  G.  d'Avenel.  The  price  » 
of  land  and  its  returns  from  1201  A.D.  to  present  time  not 
materially  different  for  period  1226  to  1325  and  1526  to  1750. 
Revenue  from  land  is  lower  on  account  of  decline  of  interest 
charges.  Present  revenue  from  land  not  higher  than  in  thir- 
teenth century.  Returns  to  cultivator  much  higher  .  .  174-181 

Varying  price  of  grains.  Fairly  uniform  average  up  to  1550. 
Great  rise.  The  low  state  of  commercial  and  industrial  de- 
velopment and  political  factional  disorganization  would  pre- 
vent influx  of  money  through  trade.  Mines  not  prolific  then. 
Foreign  commerce  insignificant.  The  natural  explanation  of 
rise  in  grain  prices  in  increasing  population  and  great  back- 
wardness in  agriculture.  The  soil  and  the  population.  Dis- 
couraging conditions.  Dearth,  famine,  and  plague.  Some 
low  price  periods  intervene.  Comparison  of  yields  pro  rata 
1600,  1700,  and  1875  to  1890  in  grains  of  all  kinds.  In- 
sufficiency of  products  to  give  bread  all  the  year  round  in 
seventeenth  century  in  return  for  possible  earnings  of  a  family. 
State  under  Louis  XIV.  Years  of  war  and  scarcity  general,  i 
The  high  taxes.  Testimony  of  John  Locke  and  Vauban's 
description.  The  onerous  system  of  taxation  grinding  and 
making  improvement  and  good  tillage  impossible.  Improve- 
ment under  succeeding  reign.  Low  prices  in  period  1725  to 
1750.  Average  level  not  higher  in  1727  to  1736  than  in  period 
1250  to  1450  and  in  1526  to  1550 182-194 


XIV  CONTENTS. 

PAGE 

Bread  prices  not  materially  changed.  Meals  at  inns  do  not  change 
in  price  average  from  1200  to  1800.  The  rate  of  wages  in 
agricultural,  mechanical,  and  domestic  pursuits  for  the  same 
long  period.  Singular  uniformity.  Shows  no  rise  correspond- 
ingly with  change  in  grain  prices.  High  prices  generally 
succeeded  by  great  mortality  .......  195-198 

Prices  of  wool  and  iron  do  not  change.  Prices  of  manufactures  of 
wool.  Very  high  in  early  periods.  Decline  in  time  coincident 
with  increase  in  money  stocks.  French  price  history  shows 
same  general  facts  as  in  England.  Prices  lower  in  every  com- 
modity, excepting  grain,  since  the  increasing  supplies  of  money 
entered  into  the  exchanges  .......  199-202 

German  Prices.  From  1350  to  1838.  The  prices  of  grain  show 
same  relations  as  in  England  and  France.  High  from  1580 
to  1720.  Thirty  Years'  War  and  other  disturbing  influences. 
Same  proportions  of  rise.  About  z\  times  old  prices.  Wages 
but  50  per  cent,  higher.  Other  products.  Prices  recede  con- 
siderably in  eighteenth  century.  Remarkable  agreement  in 
the  price  facts  of  the  three  countries  absolutely  disprove  the 
prevailing  money  theories  .......  203-212 


THIRD  PART. 
THE  TRUE  PRICE-MAKING  FACTORS     ....  215-309 

CHAPTER  X. 

RELATION   OF    THE   SHARE    OF    LABOR    TO    THE   COST    OF 

THE    PRODUCT 215-253 

Confounding  wages  and  cost  of  labor.  Rise  in  wages  going  with  de- 
cline in  labor  cost  in  progressing  countries.  Fallacious  ' '  natural 
laws."  Spinning  fine  numbers,  Fall  River,  Bolton,  and  Alsace. 
Little  difference  in  piece  rates  but  great  difference  in  time 
wages.  Highest  wages  connected  with  lowest  cost.  The  cost 
of  spinning  yarns  from  1804  to  present  time.  Reduced  to 
less  than  one  tenth  of  old  cost.  Improvements  accruing  to 
working  classes  expressed  in  pounds  of  flour.  Contrasting 
Saxony  and  Lancashire  wages  from  beginning  of  this  century. 
The  former  not  one  fourth  those  of  England  ....  215-230 


CONTENTS.  XV 

PAGE 

Groundlessness  of  fear  of  Asiatic  competition.  Competition  only 
possible  in  low  counts  with  little  labor  and  high  part  in  the 
material.  Asiatic  wages  and  depreciated  currencies  exist  in 
European  countries.  Have  not  been  sources  of  danger  to  high 
wage  countries  on  gold  basis.  Wages  in  Bohemia  cotton  mills. 
Low  wages  in  Ireland  no  incentive  to  English  capital.  Russia's 
rate  of  wages.  Infinitesimally  small  earnings  as  compared  to 
American  and  English  rates.  Peasant  industries.  Building 
trades.  Russian  cotton  industry  and  wages.  Paid  in  depre- 
ciated paper  rouble.  Not  above  Indian  or  Japanese  rates. 
The  output  contrasted.  Great  development  in  iron  industry. 
Extraordinary  fall  in  prices  without  material  reductions  in 
time  wages.  Great  progress  in  mining.  A  forty  years'  history 
of  a  copper  mine.  Wages  higher  by  25  per  cent.,  but  cost 
of  labor  per  ton  but  one  fifth  the  old  cost.  Similar  reductions 
in  the  cost  of  mining  and  of  reducing  the  precious  metals  .  230-253 

CHAPTER  XI. 

OTHER  CAUSES  OF  PRICE  DECLINES 254-270 

Price  of  iron.  Rapid  decline  after  about  1835.  Scientific  im- 
provements. Fuel  and  ore  saving.  Labor  saving.  Some 
comparisons  between  costs  of  to-day  and  of  five  years  ago  in 
Southern  furnace  work.  High  explosives,  machine  drilling, 
etc.,  in  mining.  Results  on  price  and  cost.  Bessemer  rails. 
Difference  between  cost  of  pig  iron  and  finished  product. 
Reduced  90  per  cent,  by  improving  processes,  within  25  years. 
Wages  higher  .........  254-264 

The  scientific  exploitation  of  waste.  The  creation  of  by-products. 
Their  great  commercial  value.  Improvements  in  agriculture. 
Scientific  farming  as  conducted  in  America  on  truck  farms. 
The  net  results  even  more  gratifying.  Facts  and  conclusions.  265-270 

CHAPTER  XII. 

REDUCTIONS  IN  COST  OF  OTHER  PRICE-MAKING  ELE- 
MENTS    271-284 

Cost  of  production  can  only  be  taken  relatively  in  agricultural 
products.  Expansion  of  wheat  fields  under  declining  prices. 
Position  of  working  farmer  not  desperate.  Mortgages  on 


XVI  CONTENTS. 

PACK 

identical    farms   diminishing,    not   increasing.      Why  wheat, 
corn,  and  cotton  are  raised  in  respective  zones,  despite  con- 
tinuous decline  in  price.     Point  reached  in  March  lowest  in 
wheat  for  three  hundred  years.     The  new  means  and  methods 
of  transportation.     Elimination  of  distance  as  a  price  factor. 
Low  prices  on  farms  in  distant  sections  of  the  country  in  the 
past.     Rising  prices  with  the  progress  of  railroad  building. 
Diminishing  difference  in  price  between  receiving  point  West 
and  New  York.     The  benefit  to  the  consumer  and  the  pro- 
ducer     ...........   271-281 

First  effect  of  progress  in  Government  seen  in  improving  roads  and 
water-ways.  The  splendid  system  of  road  building  of  the 
Romans.  Advantage  to  English  transportation  in  Middle 
Ages.  Left  to  run  down  in  later  centuries.  Wr retched  roads 
in  the  latter  part  of  the  eighteenth  century  complained  of  by 
writers.  Canals  not  begun  building  before  that  time.  Water- 
ways generally  unimproved.  High  cost  of  carriage.  Quota- 
tions of  rates  paid  for  carrying  goods.  Similar  conditions  and 
high  charges  in  America  before  railroad  building  .  .  .  282-284 

CHAPTER  XIII. 

OTHER  CAUSES  CONTRIBUTING  TO   HIGH   PRICES   IN   THE 

PAST 285-309 

The  many  burdens  on  trade  and  industry  considered.  The  armed 
convoys  required  to  conduct  trading  fleets.  Money  carried  on 
men-of-war.  The  expense  considered.  The  high  rate  of  profit 
necessary  to  cover  the  risks.  The  Dutch  as  the  principal 
carriers  on  the  high  seas  during  the  seventeenth  century. 
Their  grasping  and  monopolizing  tendencies.  An  object  of 
jealousy  and  hate  .........  285-291 

Monopoly  of  trading  companies  crush  individual  competition. 
Early  profits  succeeded  by  heavy  losses  to  stockholders. 
Wastefulness  in  the  absence  of  individual  responsibility. 
Extra  length  of  voyage.  Monopoly  on  land.  Degeneracy  of 
the  guilds.  Become  a  source  of  grinding  taxation  and  exaction 
by  government.  Effect  on  cost  of  production.  Limitations 
of  right  to  exercise  a  craft.  Granting  the  right  to  work  a  pre- 
rogative of  the  crown.  In  Germany  legal  limitations  extend 
to  within  recent  years.  Preventing  progress  and  spread  of 


CONTENTS,  xvii 

PAGE 

manufacture.  Taxes  and  dues.  Made  purchasable  offices. 
Trade  regulations  very  onerous.  Influence  of  the  "  Econo- 
mists "  on  freeing  trade  and  industry  .....  291—299 

Duties  and  taxes.  Custom's  taxes.  At  first  for  revenue.  Later 
for  protection.  How  they  grew.  Effect  of  gradual  abolition 
on  prices.  Effect  on  prices  in  America  of  removing  wool 
tariff.  Examples  from  recent  tariff  history.  Low  prices  the 
effect  of  the  removal  of  burdens  on  trade,  commerce,  and 
transportation,  and  of  giving  full  sway  to  the  agencies  set  in 
motion  by  enlightenment  and  liberal  laws  ....  300-309 


APPENDIX  A          ........  311-323 

A  Summary  of  the  Price  History  of  England,  France,  and 
Germany,  giving  in  parallel  columns  grain-prices  and  wages, 
with  their  purchasing  power  in  bushels  of  grain,  notably  wheat 
and  barley,  from  A.D.  1351  to  1882. 

APPENDIX  B          ........  324-344 

Introductory  letter  to  the  author's  report  on  Technical  Edu- 
cation to  the  Secretary  of  State,  separately  published  under 
the  title  "Influences  Bearing  on  Production"  by  the  De- 
partment of  State. 

INDEX  ....  .  345-352 


FIRST  PART. 


,RITICAL  REVIEW  OF  PRICE  THEORIES  AND 
MONETARY  CONDITIONS. 


CHAPTER  I. 

The  Erroneous  Premises  upon  which  the  Prevalent  Price  Theory  Rests. 

THE  prices  of  commodities  and  the  quantities  of 
money  in  circulation  have  been  so  closely  linked  together 
in  the  thoughts  of  the  people,  through  the  teachings  of  a 
purely  deductive  political  economy,  that  it  has  become 
almost  an  axiom,  not  to  be  touched  by  doubting  inquiry, 
that  a  rise  or  a  fall  of  prices  is  to  be  ascribed  to  an  in- 
creasing or  a  decreasing  supply  of  money,  and  that  any 
sudden  change  in  this  supply  must,  necessarily,  be  fol- 
lowed by  sympathetic  changes  in  prices.  Several  instances 
of  monetary  changes  bringing  about  changes,  though 
nominal  only,  in  prices,  lend  seeming  support  to  this 
view. 

It  would  be  futile  to  deny  that  a  rise  of  prices  would 
follow  sudden  expansion  of  a  certain  kind  in  the  currency 
of  a  country.  The  people  of  the  United  States  have  it 
only  too  vividly  in  their  recollection,  to  need  reminding 
of  the  fact,  that  the  paper  circulation  of  the  war  period 
brought  on  an  era  of  price  inflation,  that  values  for  a 
time  were  doubled  and  trebled  by  the  mere  fact  of  the 
change  in  the  currency.  But  this  fact  proves  rather  that 
the  purchasing  power  of  the  money  had  decreased,  be- 
cause the  people  doubted  the  ability  of  the  government 
to  exchange  its  own  money  at  par  into  the  money  of  the 
world,  /.  e.,  full-valued  coin,  then  gold  and  silver,  The 

3 


4  MONEY  AND  PRICES. 

money  supply  was  by  no  means  excessive  at  the  time 
when  the  government  paper  stood  lowest  compared  to 
what  it  is  at  the  present  time,  when  the  circulation  is 
about  two  to  one  of  the  amount  prior  to  the  time  of  the 
resumption  of  specie  payment  by  the  government.  The 
value  of  the  money  came  to  parity  only  when  it  became 
a  certainty  that  the  government  would  redeem  its  pledges. 
It  may  with  justice  be  said  that  a  government  promise  to 
pay  is  not  money,  no  more  than  the  promissory  note  of  a 
commercial  firm.  But  it  is  as  good  as  money  so  long  as 
the  credit  of  the  firm  is  undoubted.  If  it  should  come 
about  that  more  bills  come  on  the  market  than  the  charac- 
ter of  the  house  would  warrant,  the  bills  would  become 
discredited  very  soon.  Governments  have  to  submit  to  the 
same  rules  of  commercial  ethics  as  private  firms.  The 
world  is  even  justified  in  exercising  greater  caution  with 
government  issues.  An  extra-legal  position  is  created  for 
the  government  by  being  the  law-making  power,  and 
examples  are  not  wanting  of  its  availing  itself  of  its  oppor- 
tunities. Indeed,  history  does  so  abound  with  examples 
of  the  abuse  of  this  easy  "  new  way  of  paying  old  debts," 
that  it  is  hardly  necessary  to  do  more  than  make  passing 
allusion  to  the  most  prominent  instances  and  to  the  dis- 
astrous results.  Our  own  Continental  money*  and  the 
Confederacy's  money  furnish  the  necessary  reminders  for 

*  In  the  early  part  of  1776  an  English  general  reported  to  his  government  : 
"  The  Congress  paper  is  in  the  highest  credit  ;  though  before  the  year  closed 
paper  money  in  the  northern  section  of  the  country  was  struck  with  a  mortal 
blight." — Albert  S.  Bolles,  The  Financial  History  of  the  United  States,  vol. 
i.,  p.  119. 

At  the  close  of  the  same  year  it  was  that  General  Putnam,  in  command  at 
Philadelphia,  issued  an  order  :  "  Should  any  of  the  inhabitants  be  SQtio*t  to 
public  virtue  and  the  welfare  of  the  country  to  presume  to  refuse  the  cur. 
rency  of  the  American  States  in  payment  for  any  commodities  they  may 


GOVERNMENT  ISSUES.  5 

this  side  of  the  Atlantic  Ocean  of  the  possibly  worst  out- 
come of  honest  intentions  and  "  safe  beginnings." 
Neither  of  these  issues  was  ever  redeemed.  The  latter 
issue  for  the  valid  reason  that  the  authorities  which  had 
issued  the  money  went  out  of  existence.  The  Continental 
government,  however,  though  terminating  the  war  suc- 
cessfully, never  honored  its  promises,  undoubtedly  as 
sacred  when  made  as  the  promises,  under  equal  stress,  at 
the  time  of  our  late  war.  These  are  even  yet  awaiting  re- 
demption. They  do  not  share  the  fate  of  their  forerun- 
ners, because  no  one  doubts  the  ability  of  the  government 
to  finally  redeem  its  pledges. 

have  for  sale,  the  goods  shall  be  forfeited,  and  the  person  or  persons  so  re- 
fusing, committed  to  close  confinement."  (December  12,  1776.) 

But  in  matters  of  trade  sentiment  plays  a  small  part.  The  threats  and 
proclamations  of  the  authorities  seem  to  have  had  little  damaging  effect  on 
the  traders.  They  converted  their  cash  fast  enough  into  merchandise.  The 
poorer  people,  wage-earners  and  salaried  men,  suffered  most  from  the  rapid 
depreciation.  Toward  the  close  of  )  777  the  inclination  to  barter  had  be- 
come general,  "  and  as  general  an  aversion  to  dealing  in  paper  money  of 
any  kind,"  as  John  Adams  wrote  to  General  Gerry.  In  1779  twenty  paper 
dollars  were  given  for  one  silver  dollar. 

Depreciation  of  the  currency  was  by  this  time  everywhere  acknowledged, 
except  by  Congress,  which  still  refused  to  recognize  the  fact.  During  the 
year  depreciation  had  increased  to  forty-one  dollars  and  a  half  for  one  in 
silver.  But  the  next  year  (March,  1780,)  the  bill  was  passed,  the  famous 
"  forty  for  one"  bill,  which  destroyed  the  cobwebs,  declaring  forty  dollars 
in  paper  equivalent  to  one  in  specie.  But  even  these  repudiation  dollars, 
scaled  down  to  z\  cents  in  silver,  suffered  in  that  very  year  a  decline  to  one 
half  their  face  value,  until  finally  they  became  entirely  worthless. 

Josiah  Quincy,  writing  to  Washington,  November  27,  1780,  said  :  "Our 
new  paper  money,  issued  by  recommendation  of  Congress,  no  sooner  began 
to  circulate  than  two  dollars  of  it  were  given  for  one  hard  one  "  ;  and  added : 
"  I  am  firmly  of  the  opinion,  and  think  it  entirely  defensible  that  there 
never  was  a  paper  pound,  a  paper  dollar,  or  a  paper  promise  of  any  kind, 
that  ever  yet  obtained  a  general  currency,  but  by  force  or  fraud — generally 
by  both." 


6  MONEY  AND  PRICES. 

The  "  money "  with  which  Mr.  Law's  name  is  indis- 
solubly  associated  has  given  him  that  kind  of  immortality 
which  Herostratos  aimed  at.  With  the  difference,  how- 
ever, that  Mr.  Law  undoubtedly  thought  seriously  of  his 
ability  to  extricate  the  French  finances  by  his  scheme 
from  the  chaos  in  which  Louis  XIV.  had  bequeathed 
them  to  the  Regent.  The  French  assignats  had  the  same 
history.  Beginning  on  a  seemingly  safe  basis,  the  value 
of  the  confiscated  lands,  they  were  yet,  by  the  momentum 
of  the  forces  set  loose,  soon  swept  from  their  moorings 
into  the  tossing  sea  of  utter  bankruptcy  and  disaster.  No 
less  than  45,5/8  millions  of  francs  of  these  "moneys" 
were  issued.  The  story  is  ever  the  same.  Lured  into 
issue  after  issue  by  the  easy  way  of  disposing  of  first 
issues,  when  credit  is  yet  unimpaired,  governments  are 
soon  compelled  by  the  growing  difficulties,  which  were  to 
be  remedied  by  these  stratagems,  to  meet  them  by  ever 
increasing  supplies  of  paper  promises.  Draconian  laws, 
imprisonment  and  the  guillotine,  were  invoked  to  enforce 
acceptance  at  par  value.  "  Patriotism,"  however,  power- 
ful as  it  may  be  to  fire  the  heart  in  other  directions, 
seems  to  lose  its  power  when  it  is  to  make  men  give  up 
their  possessions  for  a  scrip  which  has  no  other  value 
behind  it  than  the  promise  of  a  discredited  or  doubted 
issuer.  Under  the  regime  of  this  "  money  "  prices  did 
rise  in  a  phenomenal  manner.  Although  maximum 
prices  were  prescribed  under  threat  of  execution,  one 
franc  in  silver  became  worth  from  800  to  1000  in  paper. 
The  American  Congress  declared  everybody,  who  refused 
to  take  its  money  at  par  with  silver,  an  enemy  of  his 
country,  and  subject  to  the  confiscation  of  his  goods. 
But  this  did  not  prevent  a  silver  dollar  being  worth  $100 
in  paper  in  1781.  Finally  these  issues  became  worthless 


MEANING  OF  MONEY.  7 

and  were  not  taken  at  all.  Before  the  final  extinction  of 
the  assignats  society  had  fallen  back  upon  payment  in 
kind,  upon  barter,  the  starting-point  of  civilization.  The 
French  Constitution  of  1795  made  the  pay  of  a  member 
of  the  Directory  50,000  myriogrammes  of  wheat.*  In 
America  it  was  easier  to  fall  back  upon  this  makeshift,  as 
the  country  had  hardly  emerged  from  that  state  of  civili- 
zation of  which  barter  and  payment  in  kind  are  the  char- 
acteristic features. 

The  lesson  was  not  lost  upon  students  of  history,  and 
Daniel  Webster's  words,  "  Of  all  contrivances  for  cheating 
mankind  none  has  been  more  effectual  than  that  which 
deludes  them  with  paper  money,"  will  readily  find  en- 
dorsement. 

We  leave  these  "  moneys  "  out  of  consideration  as  we 
enter  upon  our  inquiry  into  the  influence  of  the  quantities 
of  money  in  circulation  upon  prices. 

The  question  here  first  arising  is,  What  is  Money  ? 
The  word  is  derived  from  "  Moneta,"  a  surname  of  Juno, 
in  whose  temple  money  was  coined.  The  standard  coins 
and  measures  were  originally  deposited  in  temples,  as 
afterwards  in  the  churches  of  the  middle  ages.  They 
were  under  the  protection  of  the  celestial  powers.  The 
German  word  "Geld"  is  most  direct  in  its  meaning.  It 
is  derived  from  "  gelten,"  to  be  valid,  to  be  of  full  value. 

In  this  sense  alone  must  we  take  the  word,  when  we 
discuss  the  influence  of  money-supply  upon  prices ;  this 
alone  is  meant  when  the  question  agitating  the  public 
mind  for  the  last  dozen  years  is  taken  up. 

Broadly  stated  by  the  advocates  of  the  theory  the  case 
is  this :  A  decline  of  prices  having  taken  place,  incontest- 

*See  Wilhelm  Roscher,  Handbook  of  Political  Economy,  vol.  in.,  §§  52, 
54.  (One  myriogramme  =  22  Ibs.  avoirdupois.) 


8  MONEY  AND  PRICES. 

ably,  and  dating  from  the  time  of  the  closing  of  the  mints 
of  the  Latin  Union  and  the  resumption  of  specie  pay- 
ments by  the  United  States,  it  is  evident  that  this  price 
decline  is  due  to  the  appreciation  of  gold  consequent 
upon  the  demonetization  of  the  "  sister-metal,"  silver. 
The  moneys  of  the  world  cut  in  two  could  no  longer 
perform  the  functions  which  they  performed  before  the 
link  was  broken,  it  is  averred,  and  the  consequence  is 
apparent  in  the  prices.  Hinc  illcs  lacrimce, 

The  Question  of  Evidence. 

Before  going  into  an  argument  upon  the  soundness  of 
the  reasoning,  we  have  to  examine  the  evidence  presented 
by  bimetallists,  the  general  decline  of  prices  as  proved  by 
the  "  Index  Numbers  "  of  statistical  societies,  the  London 
Economist,  and  other  statistical  authorities.  But  here  it 
is  plainly  shown  that  what  is  commonly  accepted  as  the 
most  substantial  support  of  economic  deductions,  the 
world's  trade  statistics,  is,  by  the  use  made  of  them,  placed 
on  such  a  footing  that  it  rather  misleads  than  guides, 
and  opens  the  door  to  much  of  the  loose  reasoning  which 
so  often  lands  us  in  a  quagmire. 

In  these  "  Index  Numbers,"  figures  representing  ever  so 
many  different  species  of  merchandise  are  brought  to- 
gether  in  long  columns  footed  up,  and  the  results  are 
made  the  basis  of  comparisons.  They  are  treated  in  solid 
masses.  They  are  not  analyzed  so  that  the  parts  may  be 
given  their  proper  representation  in  the  totals,  or  that  an 
article  of  minor  utility  may  be  reduced  to  its  proper  posi- 
tion in  the  expense  budget  of  the  individual  or  the  nation. 
Nor  is  the  fact  borne  in  mind  that  the  prices  of  22  com- 
modities, as  in  the  Economist  numbers,  28  of  the  Statisti- 


UNCERTAIN  EVIDENCE.  9 

cal  Society,  40  of  Mulhall,  60  or  100  of  Mr.  Sauerbeck 
and  Mr.  Soetbeer,  never  rise  and  fall  at  the  same  time,  or 
even  rise  or  fall  in  equal  proportion.  The  fall  of  one 
would  balance  the  rise  of  another.  Wheat  may  rise  6 
points,  corn  4  points,  and  pork  4  points,  in  all  14  points. 
Pepper,  sugar,  indigo,  and  salt  may  aggregate  a  fall  of  an 
equal  number  of  points,  in  which  case  the  same  average 
price  ratio  would  appear.  If  the  fall  of  the  last  named 
four  articles  indicated  a  greater  number  than  14  points,  a 
general  price  reduction  would  appear  from  comparing  the 
"index  numbers"  of  the  two  years.  But  what  a  differ- 
ence to  the  poor,  (or  to  the  rich  in  the  effect  upon  their 
own  fortunes,  too,  if  these  important  commodities  in  the 
household  of  the  laboring  classes  should  be  subjected  to  a 
rise,)  compared  to  the  advantage  of  a  fall  in  commodities, 
important  enough  in  a  commercial  sense,  but  most  insig- 
nificant when  held  against  the  great  staples  which  com- 
pose the  food  of  the  millions. 

How  the  most  unequal  price  notations  and  violent 
fluctuations  still  bring  out  equal  index  numbers,  can  be 
seen  from  a  return  taken  from  ih&  Economist.  To  explain 
the  construction  of  the  table  I  will  say  in  that  paper's 
own  words  (Economist,  February  18,  1888),  that  "  the  basis 
of  100  represents  the  average  prices  of  the  six  years  1845- 
50,  and  all  the  subsequent  figures  are  calculated  from  that 
datum  line.  Thus  as  regards  coffee  (col.  i),  the  price  of 
1st  July,  1857  was  equal  to  151,  or  50  per  cent,  above  the 
average  price  of  1845-50.  In  order  to  ascertain  the  per- 
centage rise  or  fall  between  one  date  and  another — as,  for 
example,  coffee — comparing  1st  of  July,  1857,  when  the 
figure  was  151,  with  1st. January,  1866,  when  the  figure 
was  179,  or  a  difference  of  28,  the  rise  per  cent,  has  to  be 
measured  with  the  quantity  151,  and  gives,  of  course,  a 


10 


MONEY  AND  PRICES. 


result  of  19  per  cent,  as  the  real  advance."  Of  course, 
the  reader  will  understand  this  well  enough,  as  also  that 
if  100  represents  the  price  of  coffee  at  44^.  per  cwt.,  80^. 
per  cwt.  in  1878  stands  in  the  index  numbers  for  that 
year  as  182. 

I  will  now  give  the  index  numbers  of  years  which 
approach  closely  the  numbers  for  1845-50,  though  widely 
separated  in  time : 

VARIATION    OF  PRICES  AND  APPROXIMATING  TOTALS  OF 
INDEX  NUMBERS. 


1845-50 

1879 

1884 

1888 

T 

Coffee  

TOO 

141 

1  06 

1  66 

? 

Sugar  

IOO 

e.i 

e4 

4Q 

•3 

Tea  

IOO 

III 

02 

64 

l\ 

Tobacco  

IOO 

156 

2OO 

244 

c 

Wheat  

IOO 

7t 

71 

58 

6 

Butcher's  meat  

IOO 

127 

121 

1  08 

7 

Cotton  

IOO 

7^ 

0,2 

QO 

R 

Raw  silk  

IOO 

in 

117 

117 

Flax  and  hemp   

IOO 

80 

76 

66 

TO 

Sheep's  wool  

IOO 

IO7 

08 

in 

TT 

Indigo  

IOO 

164 

161 

I2Q 

T*> 

Oils  

IOO 

104 

no 

74 

T1 

Timber  

IOO 

lie 

IOO 

80 

T1 

Tallow  

IOO 

8l 

III 

71 

ie 

Leather  

IOO 

146 

I  IQ 

111 

Tfi 

Copper.  . 

IOO 

72 

71 

QI 

17 

Iron  

IOO 

77 

6q 

67 

T8 

Lead  

IOO 

84 

7O 

QO 

IQ. 

Tin  

IOO 

77 

IO4 

173 

?n 

Cotton,  Pernambuco.  ....... 

IOO 

71 

74 

7O 

21 

Cotton  yarn  

IOO 

88 

QQ 

QO 

22. 

Cotton  cloth  

IOO 

81 

88 

87 

Totals  of  index  numbers.  .  . 
Price  of  Silver  per  ounce.  .  . 

2200 

60^. 

2202 

49f<f. 

2221 

5  1'/. 

2230 

44K 

VIOLENT  PRICE   CHANGES, 


II 


The  fallacy  of  general  averages  is  plainly  apparent  when 
such  violent  price  variations  can  be  shown  in  the  22  com- 
modities as  against  one  another  and  each  one  of  them  by 
itself,  in  the  comparative  columns,  while  they  foot  up  a 
nearly  equal  total  with  the  normal  average  of  100  for 

1845-50. 

Still,  upon  such  loose  evidence  is  based  the  argument 
that  the  prices  of  a  certain  period  have  risen  or  fallen. 
Now  it  cannot  be  denied  that  during  the  last  forty  years 
we  have  lived  through  high-price  periods  and  low-price 
periods.  The  high-price  periods  show  a  higher  total  in 
the  index  numbers  than  the  low-price  periods,  though  the 
variations  are  not  less  marked.  It  is  evident  that  times 
of  great  activity  make  their  imprint  upon  prices  as  well  as 
times  of  depression,  and  it  is  equally  evident  that  such 
greater  activity  should  be  apparent  in  the  total  of  any  set 
of  index  numbers.  This  being  actually  the  case,  the  fact 
is  made  use  of  by  the  adherents  of  certain  political  or 
economic  theories  to  bolster  up  the  claims  of  their  schools 
with  utter  disregard  of  the  inherent  causes  that  gave  rise 
to  the  changed  price  facts  of  the  years  put  in  comparison. 

A  decline  of  prices  has  taken  place  dating  from  a  stated 
period,  and  as  the  decline  in  the  price  of  silver,  as  com- 
pared with  gold,  is  shown  to  have  had  its  beginning  at 
about  the  same  time,  it  has  become  the  almost  unanimous 
opinion  among  the  advocates  of  bimetallism  or  silver- 
monometallism  that  the  decline  in  the  price  of  silver  is  the 
cause  of  the  decline  in  the  price  of  commodities. 

The  co-existence,  or  rather  the  consecution  of  facts  is 
made  to  prove  that  one  is  cause  and  the  other  effect.  To 
obtain  clearness  as  to  the  truth  or  falsity  of  this  claim  is 
of  paramount  importance  at  this  juncture. 

To  prove  the  falsity  of  this  claim  it  is  necessary,  as  a 


12  MONEY  AMD  PRICES. 

first  step,  to  show  the  erroneous  methods  which  gave  so 
much  plausible  support  to  the  prevailing  price  theories. 

The  decline  in  prices  has  lent  weight  to  the  argument 
of  the  silver  men.  But  even  in  this  their  position  is  not 
correct.  Here  the  times  chosen  for  comparison  are  all 
important.  To  prove  their  case,  the  decade  of  1866  to 
1875  for  the  period  of  parity  of  silver  and  of  high  prices, 
and  the  year  1885  for  silver  decline  and  low  prices,  stand 
well  together.  And  here  it  is  where  so  much  error  pro- 
ceeds from  otherwise  willingly  accepted  data.  The  times 
for  comparison  conveniently  chosen,  almost  anything 
can  be  proven  from  "  Index  Numbers,"  which  in  them- 
selves are  so  full  of  error  as  has  been  shown.  Here  chance 
has  done  the  work  for  silver  which  no  amount  of  fore- 
thought could  have  improved  on.  In  economic  deduction, 
however,  everything  depends  on  the  sifting  of  data  and 
taking  like  and  like  for  comparison.  The  importance  is 
far-reaching.  Property,  wages,  and  the  well-being  of  all 
classes  depend  on  legislation  on  finance  and  taxation. 
The  legislator  depends  solely  on  what  he  understands  to 
be  facts.  If  these  facts  are  spurious,  what  else  can  be 
expected  but  ill-advised  and  dangerous  legislation  ? 

Now  let  us  see  what  these  comparisons  of  prices  on 
which  this  silver  agitation  rests  actually  show.  The  prices 
which  I  introduce  are,  of  course,  English  prices.  Prices 
of  American  commodities  are  unsuitable.  For  1866  to 
1875  they  have  the  double  inflation  of  the  gold  premium 
and  the  war  tariff.  But  even  in  England  the  two  price- 
periods  are  by  no  means  equivalents,  a  fact  constantly 
ignored  by  bimetallists  the  world  over.  The  inflation  of 
all  prices  during  the  decade  of  1866  to  1875  by  extraneous 
causes  was  greater  than  even  during  the  preceding  ten 
years,  which  had  the  inflating  influence  of  the  Crimean 


WAR  PERIODS  AND  PRICES.  13 

war  and  the  American  war  to  carry.  The  decade  from 
which  bimetallists  draw  their  conclusions  bore  the  effects, 
not  only  of  inflation  and  speculation  left  over  from  the 
American  war,  but  also  from  the  Franco-German  war  of 

1870,  with  the  intense  commercial  and  industrial  activity 
following  the  destruction  of  property  in  France  and  the 
gift  of  the  Pandora  box  of  five  milliards  to  Germany.* 

The  price  of  pig-iron  in  1871  averaged  $Ss.  lid.  accord- 
ing to  the  returns  of  the  Board  of  Trade ;  in  1872  it 
averaged  lois.  iod.;  in  1873,  n?s.  $d.\  in  1874,  S?s.  6d.; 
in  1886,  it  was  back  again  to  the  old  price,  of  the  year 

1871,  to  wit :  58^.  6d.     Bar  iron,  in  1871,  £7,  12s,  6d,  was 
£11  in  1872  ;  in  1873,  £12  los-  °d->  m   l%74>  £10  $*•  od., 
and  in  1876  it  had  gone  back  to  £7  $s.  od.  the  price  of 
1871. 

Now  suppose  you  have  noted  down  in  the  one  ten-year 
period:  Cotton  148^.,  tobacco  104,  pig-iron  125,  bar  iron 
235,  coal  21,  to  name  a  few  articles  chiefly  affected  by  the 
two  causes  of  war  and  speculation,  and  put  opposite  for 
1885:  Cotton  58*.,  tobacco  64^.,  pig-iron  425.  (28.?.  for 
Cleveland  iron),  bar  iron  89^.,  coal  gs.,  and  you  can  well 

*The  extraordinary  fluctuations  of  prices  taken  from  the  same  totals  of 
"  Index  Numbers  "  during  this  period  of  parity  can  be  seen  from  the  follow- 
ing abstract  (given  in  round  numbers  up  to  1870)  along  with  the  current 
price  of  silver  given  in  pence  per  ounce  : 

Index  Numbers.  Price  of  Silver. 

'845-50  22OO 

1857  3000 

1858  26OO 

1865  3600 

1866  3580 

1867  3040 
J868  2680 

1869  2650 

1870  2689 

1871  2590 

1872  2835 

1873  2947  59**. 

1874  -2891  58  A</. 

1875  2778  56J<£ 


14  MONEY  AND  PRICES. 

imagine  how  easy  it  is  to  prove  the  case  of  a  decline  in 
price  of  commodities  "  due  to  the  depreciation  in  the  price 
of  silver." 

The  prices  of  other  commodities  were  likewise  affected, 
though  in  a  more  moderate  degree.  We  can  see  how  apt 
we  are  to  draw  wrong  conclusions  when  we  do  not  apply 
to  statistical  data  the  scrutiny  which  no  business  man 
would  fail  to  employ  in  his  own  transactions,  but  which 
he  may  be  sure  to  leave  safely  locked  up  in  his  office  desk 
when  he  is  perchance  called  upon  to  apply  them  to 
national  or  international  affairs. 

The  comparing  of  the  highly  inflated  years  with  the 
depressed  year  gives,  by  taking  the  two  examples  cited 
above,  632  for  the  five  articles  named  for  the  former 
period  and  262  for  the  latter.  The  addition  of  a  great 
number  of  articles  of  smaller  fluctuations,  of  course,  re- 
duces the  final  proportions  .in  the  aggregate  of  figures 
usually  taken  by  the  different  authorities  for  their  "  index 
numbers,"  and  from  which  they  prove  the  increase  or 
decrease  of  prices.  Now,  if  we  go  back  a  generation  and 
take  the  prices  of  the  same  five  articles  for  the  year  1854, 
we  have  cotton  54,  tobacco  51,  pig-iron  79,  bar  iron  200, 
coal  23,  in  all  407.  These  same  articles  show  for  1860: 
Cotton  60,  tobacco  58,  pig-iron  53,  bar  iron  130,  coal  9, 
in  all  310.  The  methods  of  production  were  not  very  dif- 
ferent in  1854  and  1860.  But  the  price  aggregate  is  much 
higher  in  1854  than  in  1860,  on  account  of  the  war 
demand  for  iron  and  coal.  Cotton  and  tobacco,  on  the 
contrary,  were  lower.  This  shows  the  different  influences 
operating  on  prices  of  different  articles  collected  in  the 
same  columns,  added  up,  averaged,  and  demonstrated  on. 

On  the  whole,  the  year  1860  would  give  the  most 
normal  basis  for  comparison.  It  was  a  year  of  peace  and 


SLIGHT  DIFFERENCES  ONLY.  1$ 

tranquillity  and  general  business  activity.  It  shows  us  310 
in  the  price  aggregate,  against  262  for  1885.  Not  a  great 
difference,  it  must  be  admitted,  to  build  a  labored  theory 
on. 

The  difference  between  1860  and  1885  is  only  48,  on  a 
basis  of  310.  If  we  take  the  year  1890,  with  high  iron 
.prices,  we  get  290,  a  difference  of  20  only.  I  have  taken 
articles  of  great  magnitude  in  international  commerce  and 
in  home  consumption.  Two  are  agricultural  and  three 
industrial  products. 

A  selection  of  45  articles,  food,  textiles,  minerals,  and 
sundries  (for  which  1867-76  is  taken,  as  100)  averages 
only  75  for  1851  ;  but  for  1854,  on  the  contrary,  102;  for 
1873,  they  show  in;  for  1881,  they  show  85,  and  for 
1885,  fall  to  73.  This  is  not  much  below  the  level  of  1851, 
when  silver  was  at  a  premium  over  gold,  and  few  of  the 
revolutionizing  improvements  in  productive  methods  had 
been  set  in  operation.  Mr.  A.  Sauerbeck,  whose  compu- 
tation from  the  Statistical  Society  Journal  serves  in  this 
instance,  gives  the  average  price  level  (taking  as  a  basis 
100  for  1867-76)  for  lo-year  periods  for  45  articles  as 
follows : 

1843  to  1852 82 

1853  to  1862 99 

1866  to  1875 lor 

1876  to  1885 85 

Whatever  we  may  say  of  the  method  of  obtaining 
them,  the  "  index  numbers  "  of  the  different  compilers 
show  the  present  price  level  to  be  not  very  different  from 
that  prevailing  before  the  Crimean  war. 

But  what  about  that  commodity  which,  according  to  all 
the  schools  is  the  chief  price  maker — labor  ? 

Labor  is  the  only  commodity  which  has  constantly  been 


16  MONEY  AND  PRICES. 

rising.  From  1850  to  the  present  time  the  rise  has  been 
continuous,  and  has  maintained  itself  all  over  the  modern 
industrial  world. 

Labor  and  Wages. 

Labor  is  higher  to-day  than  in  the  sixties  and  seventies, 
with  their  level  of  high  prices.  It  is  certainly  50  per  cent, 
over  the  low-priced  period  of  1850  in  Germany,  France, 
and  England.  It  is  100  per  cent,  higher  in  the  United 
States. 

If  the  fall  in  silver  were  the  cause  of  the  fall  in  prices, 
the  rate  of  wages  would  have  been  affected  likewise.  A 
general  cause  must  have  a  general  effect.  What  is  of 
greatest  significance  is  the  fact  that  wages  have  risen  in  so 
high  a  ratio  only  in  the  gold-paying  countries.  In  the 
countries  adhering  to  the  silver  standard  the  rate  of  wages 
has  been  stagnant,  or  undergone  but  slight  changes.*  All 
this  can  be  demonstrated  to  a  certainty,  from  which  I 
must  abstain  now  from  want  of  space.  The  matter,  how- 
ever, has  been  so  fully  proved  that  the  reader  will  not  re- 
quire more  detailed  facts  than  what  will  be  given  in  the 
progress  of  these  pages  for  his  orientation. 

The  rise  in  wages  is  the  absolute  proof  that  the  fall  in 
the  price  of  commodities  is  due  to  invention  and  science, 
to  the  most  forcible  application  of  mind  to  production  the 
world  has  ever  seen.  This  has  made  labor  so  productive 
that  it  can  demand  and  obtain  higher  pay,  and  at  the  same 
time  produce  at  greatly  reduced  cost.  To  show  this  con- 
clusively we  must  abandon  "  index  numbers  "  and  aver- 
ages and  follow  the  safe  road  of  comparison  by  concrete 
cases. 

*  See  chapter  X. 


£>£CLIN£  IN  LABOR  CdST.  1? 

To  find  a  case  calculated  to  cover  all  the  elements  in 
the  discussion  we  have  only  to  fall  back  upon  cotton  and 
cotton  manufactures  and  show  their  price  relations  in  the 
two  periods  mentioned  ; 

1854    1889  1854    1889 

J.  d.  s.  d,  cents,  cents. 

Raw  cotton per  cwt.       53.7  53.0  per  Ib.       n.6  11.5 

Cotton  yarn "     "         112.0  103.0  "     "        24.3  22.3 

Cotton  cloth,  plain ....  too  yds.       25.0  19.0  "  yard       6.1  4.6 

"      printed..   "     "          34.0  25.0  8.3  6.1 

The  gold  price  of  cotton  is  the  same  as  before  the  war. 
The  price  of  the  goods  made  out  of  the  cotton,  /.  e.,  the 
cost  of  the  labor  expended  on  turning  the  cotton  into 
goods,  shows  the  remarkable  fall  indicated  above.  The 
greater  the  proportion  of  labor  to  the  value  of  the 
material,  the  greater  the  decline  in  the  price.  The  raw 
cotton  is  equal  in  price.  In  the  yarn  we  note  a  fall  of  8 
per  cent.  ;  in  the  plain  goods  of  24  per  cent ;  and  in  the 
printed,  of  27  per  cent.  The  cotton  is  subject  to  the 
competition  of  countries  which  stand  on  a  silver  basis. 
India  has  been  the  chief  competitor.  The  decline  in  the 
value  of  the  rupee  has  haunted  to  no  small  degree  the 
imagination  of  the  cotton-planter  in  America.  If  the  fall 
in  the  price  of  silver  were  the  cause  of  the  fall  in  prices, 
then  certainly  cotton  ought  to  have  fallen  correspondingly. 
Silver  was  over  6\d.  an  ounce  in  1854  ;  it  was  only  42^.  in 
1889.  The  price  of  cotton,  however,  had  not  varied.  No 
one  can  deny  that  the  decline  which  has  happened  since 

1889  is  due  exclusively  to  the  two  phenomenal  crops  of 

1890  and  1891,  which  left  an  unconsumed  surplus  on  hand, 
after  the  low  crop  year  of  1892,  of  nearly  3,500,000  bales. 
In  the  year  1892-93  when  the  crop  was  but  an  average  crop, 


18  MONEY  AND  PRICKS. 

the  price  rose,  at  onetime,  to  the  high  figure  of  io|- cents, 
though  silver  had  had  a  further  drop.  Nothing  plainer 
but  that  the  over-supply  is  the  cause  of  the  great  falling 
away  of  price  in  cotton,  as  seen  again  in  the  price  decline 
following  the  large  crop  of  1894. 

But  the  labor  and  cost  of  turning  the  cotton  into  yarn, 
the  yarn  into  cloth,  the  cloth  into  prints,  is  all  added  in 
gold-paying  England,  which  regulates  the  price  of  manu- 
factures for  all  other  exporting  countries.  If  the  theories 
which  have  been  at  the  root  of  all  this  agitation  were 
sound,  then  a  rise  ought  to  be  manifest  in  that  part  of  the 
prices  which  is  added  by  labor,  earning  daily  rates  varying 
from  50  to  100  per  cent,  higher  than  in  the  early  years  of 
the  fifties. 

No  better  proof  need  be  given  of  the  economic  fallacies 
generated  by  blindly  following  statistical  compilations 
than  in  this  illustration  of  prices  of  cotton  manufactures. 
This  is  further  illustrated  by  holding  the  results  of  this 
examination  of  a  concrete  case  against  what  I  have  shown 
as  the  usual  statistical  method,  that  of  averaging  prices  of 
a  large  number  of  commodities  entirely  unrelated  and  dis- 
crepant in  their  importance  as  articles  of  consumption, 
and  drawing  comparisons  from  them  without  regard  even 
to  war  and  other  extraordinary  influences  on  prices. 

If  experience  must  be  the  basis  for  all  reasoning,  facts 
must  be  the  basis  for  economic  deductions.  But  what  are 
facts?  Mere  statistical  tabulations  and  the  indiscriminate 
use  made  of  them  are  not  facts  and  certainly  not  very  re- 
liable guides  for  legislators  to  follow. 


CHAPTER  II. 

The  Prevailing  Money  Theories — The  Money-Metals — The  Varying  Rela- 
tions of  Output  between  them — Does  not  Affect  their  Value  Relations. 

NAMES  of  the  highest  authority  have  given  weight  to 
the  doctrine  that  the  quantity  of  the  precious  metals  in 
existence  determines  the  prices  of  commodities.  Montes- 
quieu *  formulated  the  theory  that  "  prices  are  fixed  in 
the  ratio  of  the  whole  of  the  commodities  to  the  whole 
of  the  signs  "  (gold  and  silver),  "  compounded  with  the 
ratio  of  the  whole  of  the  commodities  in  the  channels  of 
trade  to  the  whole  of  the  signs  in  these  channels.  The  estab- 
lishment of  prices  depends  always,  fundamentally,  upon 
the  ratio  of  the  total  of  commodities  to  the  total 'of  signs." 

This  view  is  generally  accepted.  Montesquieu,  how- 
ever, is  not  the  originator  of  the  theory.  As  far  back  as 
1588  Davanzati  in  Lezione  sulle  Moncte\  says:  "All 
commodities  which  serve  to  satisfy  the  wants  of  man  are 
by  convention  equal  in  value  to  all  the  gold,  silver,  and 
copper.  The  parts  are  subject  to  the  same  rule  as 
the  whole."  Montanari,  in  Delia  Moneta  sets  forth 
the  same  views,  but  adds  the  limitation  "spendibile 
in  commercio "  (to  be  expended  in  commerce).  Locke 
goes  even  so  far  as  to  say,  there  being  now  ten  times  as 
much  silver  in  the  world  than  at  the  time  of  the  discovery 

*  Montesquieu,  Esprit  des  Lois. 

\  Quoted  by  Wilhelm  Roscher,  Grundlagen  der  National  Ofkonomie^  vol. 
i.,  §.  123,  2ist  edition. 

19 


20  MONEY  AND  PRICES. 

of  America,  the  value  of  every  unit  of  silver  is  only  one 
tenth  as  much  as  then  compared  with  merchandise  re- 
maining unchanged.  He  is  of  the  opinion  that  with 
money  the  demand  is  always  equally  strong,  always  up 
to  the  supply,  while  with  merchandise  this  is  not  the  case. 
Wilhelm  Roscher  says  of  Hume  *  that  he  knows  well 
enough  that  only  the  money  in  circulation  and  the  mer- 
chandise in  circulation  have  a  bearing  upon  prices,  but 

*  Hume,  the  historian,  contradicts  the  deductive  essayist  in  a  manner 
that  I  cannot  refrain  from  quoting  here  his  statements  referring  to  price 
comparisons  of  his  time  and  that  of  Elizabeth  and  James  I. 

"  The  price  of  corn  during  this  reign  (James  I.),  and  that  of  the  other 
necessaries  of  life,  was  no  lower,  or  was  rather  higher,  than  at  present.  By 
a  proclamation  of  James,  establishing  public  magazines,  whenever  wheat 
fell  below  thirty-two  shillings  a  quarter,  rye  below  eighteen,  barley  below 
sixteen,  the  commissioners  were  empowered  to  purchase  corn  for  the 
magazines.  These  prices,  then,  are  to  be  regarded  as  low,  though  they 
would  rather  pass  as  high  by  our  present  estimates.  The  usual  bread  of  the 
poor  was  at  this  time  made  of  barley.  The  best  wool  during  the  greater 
part  of  James's  reign,  was  at  thirty-three  shillings  a  tod.  At  present  it  is 
not  above  two  thirds  of  that  value  ;  though  it  is  to  be  presumed  that  our  ex- 
ports in  woollen  goods  are  somewhat  increased.  The  finer  manufactures, 
too,  by  the  progress  of  arts  and  industry,  have  rather  diminished  in  price, 
notwithstanding  the  great  increase  of  money.  In  Shakespeare,  the  hostess 
tells  Falstaff  that  the  shirts  she  bought  him  were  Holland  at  eight  shillings 
a  yard  ;  a  high  price  at  this  day,  even  supposing,  what  is  not  probable,  that 
the  best  Holland  at  that  time  was  equal  in  goodness  to  the  best  that  can 
now  be  purchased.  In  like  manner  a  yard  of  velvet  about  the  middle  of 
Elizabeth's  reign  was  valued  at  two  and  twenty  shillings." 

Referring  to  1776  he  says  in  footnote  :  "  Money,  too,  we  may  observewas 
in  most  particulars  of  the  same  value  in  both  periods ;  she  (Elizabeth)  paid 
eightpence  a  day  to  every  foot  soldier." 

He  makes  the  very  wise  deduction  from  the  facts  in  explanation  of  the 
higher  cost  of  living  at  his  time  : 

"  The  chief  difference  in  expense  between  that  age  and  the  present,  con- 
sists in  the  imaginary  wants  of  men,  which  have  since  extremely  multiplied. 
These  are  the  principal  reasons  why  James's  revenue  would  go  farther  than 
the  same  money  in  our  time  ;  though  the  difference  is  not  near  so  great  as  is 
usually  imagined." — Hume,  History  of  England,  vol.  iv.,  Appendix  iii. 


FALLACY  Of  THEORIES.  21 

"  he  does  not  strike  the  idea  yet  that  the  rapidity  of  cir- 
culation has  to  be  considered."  That  the  theory  of  money 
here  reviewed  and  still  current  is  untenable  appears 
from  the  mere  consideration  of  the  sums  of  money  and 
quantities  of  merchandise  in  existence  at  any  one  time. 
So  it  is  pointed  out  by  Mr.  Michel  Chevalier  that  the 
money  quantities  of  France  in  existence  in  1851  were  esti- 
mated at  between  3^-  and  4  milliards  of  francs,  while  the 
value  of  real  property  alone  amounted  according  to  offi- 
cial valuation  to  83  milliards  of  francs.  The  value  of 
realty  is,  naturally,  determined  by  the  development  of 
industrial  production.  But  even  the  values  of  circulating 
merchandise,  i.  e.  the  annual  product  going  into  the  chan- 
nels of  commerce,  bears  no  positive  relation  to  the  quan- 
tities of  money  in  circulation. 

The  money  quantities  in  existence  in  the  United  States 
in  1880  are  estimated  at  about  $1,400,000,000.  According 
to  my  calculation,*  taking  the  salable  value  of  the  crops 
at  the  shipping  ports  and  adding  the  additional  value 
given  to  the  raw  material  by  the  manufacturing  indus- 
tries of  the  country,  plus  the  distributing  expenses 
and  the  profits  of  capital,  the  commercial  value  of 
the  annual  product  in  the  consumers'  hands  was  then 
$7,680,000,000.  f 

Here  the  proportion  of  money  to  annually  circulating 
merchandise  is  as  one  to  five. 

But  we  have  here  a  very  important  fact  to  chronicle 
which  at  once  sets  at  naught  all  the  arguments  of  the 
adherents  of  the  mechanical  price  theory. 

*  See  J.  Schoenhof,  The  Industrial  Situation,  ch.  xii.,  p.  103. 

f  This  is  below  the  prevalent  estimates.  But  my  estimates  are  based  on 
an  elimination  of  repetitions  in  values,  and  differ  in  this  from  the  usually 
inflated  American  official  statistics,  in  which  an  absence  of  critical  acumen 
is  frequently  too  manifest. 


22 


MONEY  AND  PRICES. 


The  resumption  of  specie  payments  in  1878  had  by 
1880  added  something  like  $600,000,000  to  the  paper 
forming  the  only  currency,  except  the  specie  circulation 
on  the  Pacific  Coast.  The  quality  of  the  currency  was 
improved  by  the  resumption  act,  and  notwithstanding  the 
large  increase  in  quantity  of  money,  no  changes  in  prices 
were  perceptible,  except  in  articles  of  merchandise  in 
which  the  change  can  easily  be  traced  to  other  causes  still 
fresh  in  everybody's  remembrance.  I  will  show  this  by 
the  prices  of  principal  commodities  in  1877  ano^  1880.* 


Names  of  Commodities. 

Prices. 

1877. 

Dollars. 

1880. 

Dollars. 

Corn    bu  

0.587 
I.  J7 
6.49 
O.IlS 
0.239 
O.IO8 
O.IOg 
O.Og 
0.075 
O.2O6 

0.118 
0.259 
0.052 
o.  116 

O.  IO2 

18.88 
45.55 
35.25 
45.50 
2.57 
2.59 
3.15 
0.118 
0.0846 
0.1246 
0.0438 

0.543 
1-25 

5.88 
0.115 
0.233 
0.067 
0.074 
0.06  1 
0.064 
0.171 
0.095 
0.165 
0.043 
0.09 
0.077 
28.50 
60.38 

49-25 
67.50 
3-68 
4-53 
3-75 
0.115 
0.0851 
0.1274 
0.0451 

Wheat  "  

Wheat  flour  bs  

Cotton,  pd  

Leather  "  

Bacon  and  hams,  pd  

Lard,  pd  

Pork     "  .                ..                            .      . 

Beef,  salted,  pd  

Butter,  pd  

Cheese  "  

Eggs    doz   

Starch   pd  

Sugar,  refined,  pd  

Leal  tobacco,  pd  

Pig-iron,  No    I,  Anthracite    Pliila     ton  

Bar  iron,  ton  

Iron  rails    "  

Steel  rails  "     

Cut  nails,  100  Ibs  

Anthracite  coal,  ton  

Bituminous  coal,  "    

Standard  sheetings,  yard  

Standard  drilling,  yard  .                              

New  York  mills  bleached  shirting,  yard  
Print  cloths,  64  x  64,  yard  

*  See  Statistical  Abstract  of  the  United  States,  1891. 


FLUCTUATION   IN  IRON.  2$ 

If  we  were  to  foot  up  the  twenty-six  articles  here  named 
we  should  undoubtedly  get  a  higher  total  for  1880  than 
for  1877.  Those  eager  for  proofs  supporting  the  quantity 
theory  would  certainly  find  it  in  the  "  index  numbers  " 
based  on  the  totals  so  obtained.  But  we  see  that  the  in- 
crease is  solely  derived  from  higher  prices  of  iron,  steel, 
and  coal.  These,  as  everybody  knows,  were  suddenly 
raised  in  a  phenomenal  manner  by  the  great  boom  in  iron 
which  in  the  fall  of  1879  began  its  meteoric  course,  from 
the  great  depression  following  the  panic  of  1873.  The 
boom,  as  will  be  remembered,  led  to  the  panic  of  1884, 
following  which  came  another  four  years  of  depression 
and  a  repetition  of  the  same  alternations  in  almost  the 
same  quadrennial  or  quinquennial  periods. 

Iron,  it  must  be  noted  here,  is  more  influenced  in  this 
erratic  manner  than  other  commodities,  because  during 
long-continued  depression  iron  furnaces  are  blown  out  to 
reduce  the  output.  The  deterioration  of  the  plant,  the 
time  for  repair  and  putting  in  blast  when  demand  revives, 
is  great  enough  to  create  a  scarcity  for  a  considerable 
length  of  time,  which  makes  it  almost  certain  that  high 
prices  follow  in  the  wake  of  a  period  of  stagnation.  All 
articles  of  which  pig-iron  is  the  basis  naturally  follow  in 
the  same  run  of  price  inflation  until  the  collapse,  always 
certain  to  succeed  extraordinary  expansion,  sets  in  again. 
Now  if  we  take  iron  and  connected  branches,  like  coal, 
out  of  the  columns,  we  find  the  prices  of  most  of  the 
other  commodities  to  be  essentially  unchanged,  while 
meat  products  are  even  considerably  lower  than  in  the 
year  of  the  smaller  money  supply. 

If  the  theory  were  correct  that  an  expansion  of  the 
money  supply  raises  the  prices  of  commodities,  it  would 
follow  that  the  adoption  of  a  paper  currency  driving  the 


24  MONEY  AND  PRICES. 

demonetized  specie  into  neighboring  countries  would 
raise  the  ordinary  standard  of  prices  there.  But  investi- 
gation has  been  unable  to  show  that  this  was  the  case  in 
similarly  affected  periods,  as  evidenced  by  Tooke  and 
other  writers,*  neither  can  we  find  any  trace  of  such  an 
occurrence  as  the  consequence  of  the  American  acts,  regu- 
lating the  money  circulation  of  the  years  1861  to  1875. 

The  geometrical  treatment  of  prices,  equating  a  given 
bulk  of  money  with  a  given  bulk  of  merchandise  is  cer- 
tainly an  easy  method  of  solving  a  great  problem.  It 
need  not  surprise  us  that  experts  went  to  work  to  adduce 
proof  by  algebraic  test  so  as  to  give  an  apparently  mathe- 
matical basis  of  certainty  to  an  array  of  otherwise  unau- 
thenticated  assumptions.  Evidence  to  the  contrary, 
however,  has  been  brought  forward  by  some  of  the  most 
painstaking  investigators,  but  the  doctrine  still  holds  full 
sway  and  certainly  supplies  a  sort  of  "  scientific  "  basis  to 
the  agitation  for  the  "  rehabilitation  of  silver  "  and  co-rela- 
tive demands. 

Arthur  Young  in  1811  published  his  Inquiry  into  the 
Progressive  Value  of  Money  in  England.  In  his  intro- 
duction he  speaks  of  the  pains  he  took  in  the  collection 
of  his  data.  "  I  examined,"  he  says,  "  a  multitude  of 
authorities  from  which  I  extracted  a  great  variety  of 
prices,  carefully  referring  to  every  authority,  quoting  the 
volume  and  page,  and  combining  them  with  all  to  be 

*  "  That  the  markets  of  the  world  are  not  so  easily  put  in  perturbation  by 
an  increase  of  the  circulating  mediums  is  authenticated  among  other  things 
by  the  facts  how  the  enormous  outflow  of  the  French  metal  money  in  conse- 
quence of  the  paper  emissions  of  1716  to  1720  and  again  of  1790  met  with 
declining  prices  on  the  surrounding  corn  markets.  And  yet  the  former  has 
amounted  to  four  hundred  million  francs  and  the  latter  at  least  to  one  thous- 
and million  francs." — Wilhelm  Roscher,  Grundlagen  der  National  Oekq- 
nomie,  vol.  i. ,  page  369. 


ARTHUR    YOUNG  AND    TOOKE.  2$ 

found  in  the  books  cited  by  Sir  George  Shurkburgh,  as 
well  as  with  the  details,  more  numerous  than  had  before 
been  published,  given  by  Sir  Frederic  Eden  in  his  State 
of  the  Poor.  These  prices  I  reduced  with  much  labor  to 
the  standard  of  our  present  money.  The  investigation 
occupied  myself,  an  amanuensis,  and  an  accountant,  with 
other  occasional  assistance,  much  the  greater  part  of  ten 
months  and  at  no  inconsiderable  expense." 

According  to  this  minute  and  careful  investigation  the 
whole  advance  in  prices  was  not  more  than  in  the  proper- 
tion  of  i  to  3  from  the  fifteenth  century  to  the  year  1810. 
If  we  were  to  reduce  the  prices  of  1810,  inflated  by  war 
influences,  to  those  ruling  in  the  preceding  period,  the 
difference  would  not  be  more  than  in  the  proportion  of  I 
to  2.  The  increase  in  the  stock  of  the  precious  metals, 
employed  as  money,  however,  was  as  I  to  n.  Adam 
Smith  shows  in  his  table  of  prices  of  wheat  that  the  prices 
were  lower  in  the  first  half  of  the  eighteenth  century  than 
at  the  end  of  the  sixteenth  and  during  the  seventeenth 
century. 

Tooke,  in  his  examination  as  to  the  History  of  Prices 
covering  the  period  from  1793  to  1839,  comes  to  the  con- 
clusion "  that  the  alterations  of  prices  originated  and  mainly 
proceeded  from  alterations  in  circumstances  distinctly  af- 
fecting commodities,  and  not  in  the  quantity  of  money." 

An  examination  of  the  facts  has  always  made  the  point 
clear  enough.  And  it  is  not  a  very  encouraging  sign  of 
the  progress  of  economic  thought  that  every  generation 
has  to  fight  the  battle  over  again.  We  can  combat  these 
ever-recurring  aberrations  only  by  fixing  the  attention  of 
the  speculative  mind  upon  the  main  facts,  and  this  we  can 
accomplish  only  by  strictly  pursuing  the  historic  method 
of  inquiry. 


26 


MONEY  AND  PRICES. 


.  . 
*d 


We  shall  therefore  give  a  more  exhaustive  treatment  to 
this  part  of  our  discourse  later  on,  and  examine  first  the 
claim  that  the  fall  in  the  price  of  silver  is  due  to  the  change 
in  the  ratio  of  the  outputs  of  gold  and  silver. 

The  Relative  Output  of  Gold  and  Silver. 

Much  is  made  by  the  bimetallists  of  Europe  and  by 
the  silver-men  of  America  of  the  demonetization  of  silver 
by  the  commercial  nations  of  the  world.  It  is  treated  as 
an  injury  done  to  the  common  people.  Reversely  it  is 
made  to  appear  that,  if  remonetization  could  be  accom- 
plished, it  would  work  a  miracle  in  curing  the  evils  the 
body  politic  is  suffering  from.  Manchester  expects  a 
never-ending  demand  for  its  cottons  at  highly  remunera- 
tive prices.  The  territorial  lords  of  Germany  promise 
their  tenants  and  the  agriculturists  prosperous  times,  high 
prices,  good  wages  and  (possibly)  good  crops.  Our  own 
advocates  of  "  Free  Coinage  "  expect  and  promise  no  less. 

But  it  seems  that  in  the  discussions  concerning  the 
alleged  conspiracy  of  the  "money  power,"  against  "the 
people,"  in  which  it  is  claimed  that  through  the  degra- 
dation of  silver  the  people  are  discriminated  against, 
the  positions  of  the  two  money  metals  are  not  properly 
understood,  or  at  least  the  inquiries  neglect  to  exhaust 
the  subject.  The  relative  positions  in  different  periods 
duly  considered  would  demonstrate  the  correctness  of 
^hat  I  have  endeavored  to  show,  namely :  that  the  fall  in 
the  price  of  commodities  is  one  thing  and  the  fall  in  the 
of  silver  quite  another,  and  that  the  two  stand  in  but 
remote  relation  to  each  other. 

It  is  maintained  that  the  decreased  output  of  gold  since 
1875,  as  compared  with  silver,  has  caused  the  depreciation 
of  silver. 

AS  in  the  question  of  the  fall  in  prices  so  in  the  com- 


QUANTITY  RELA  TIONS.  2/ 

parison  of  output  of  the  two  metals,  the  discussions  barely 
touch  a  longer  period  than  that  covered  by  the  last  two 
decades.  But  in  order  to  have  a  clear  survey  of  the  field, 
we  have  to  go  back  to  the  position  which  the  two  metals 
held  to  each  other  up  to  1850,  and  then  consider  what  it 
has  become  since.  We  shall  see  then  that  the  deprecia- 
tion of  silver  is  due  to  natural  and  very  powerful  eco- 
nomic agencies,  though  different  from  those  usually 
assumed.  We  find  that  in  the  whole  period  preceding 
1850,  the  production  of  silver  had  in  value  constantly  and 
continuously  been  far  in  excess  of  that  of  gold.  It  is  esti- 
mated by  competent  authority  that  in  the  early  years  of 
the  present  century  there  were  thirty-three  tons  of  silver 
in  the  world  to  one  of  gold.  If  the  price  of  silver  were 
determined  by  ratio  or  quantity,  the  price  ratio  would 
have  been  in  the  neighborhood  of  33  to  I,  instead  of  15^ 
to  I,  the  then  existing  ratio. 

As  regards  the  production  of  the  two  metals,  Alexan- 
der von  Humboldt,  who  had  good  opportunities  for  gath- 
ering information  on  the  spot,  estimates  the  product  of 
the  American  mines  from  their  discovery  down  to  the 
year  1803  at  51  times  as  much  silver  as  gold.  In- 
cluding all  the  known  mines  of  the  world  gives  the  ratio 
of  45  to  i.  (See  Humboldt,  Essai  Politique  stir  le 
Royanmc  de  la  Nouvelle  Espagnc^) 

The  quantities  of  gold  to  silver  were  from  the  time  of 
the  opening  of  the  silver  mines  of  Potosi,  i.e.,  1545,  in 
proportion  of  about  3  gold  to  97  of  silver  as  the  average 
of  the  300  years.  In  the  periods  named  here  below  the 
proportions  average  as  follows  in  quantitative  output : 

Gold.  Silver. 

Per  cent.        Per  cent. 

1493-1600 2.9  97.1 

1601-1700 2.4  97.6 

1781-1820 2.1  97.9 

1821-1840 .  3.2  98.6 


28 


MONEY  AND  PRICES. 


As  can  be  seen  this  gives  a  ratio  varying  from  30  to  45 
to  i,  if  these  great  time  divisions  are  taken  into  view. 
Within  these  wider  divisions  variations  of  far  greater  ex- 
tent occurred. 

At  no  time,  however,  did  the  quantity-relation  deter- 
mine the  value.  From  1492  to  1520  the  output  averaged 
5800  kilos  gold  and  47,000  kilos  silver,  which  is  about  I 
to  8.  The  commercial  ratio  then  was  about  I  to  II. 
From  1521  to  1544  the  output  was  7160  kilos  gold  to 
90,200  silver,  or  a  change  to  I  to  12^,  without  changing 
the  ratio  of  the  commercial  values  of  the  two  metals. 
The  discovery  of  the  mines  of  Potosi  in  1545  and  of 
Guanajuato  in  1556,  changed  the  quantity-relation  to  an 
extraordinary  degree  without  at  all  affecting  the  value  of 
silver  for  fifty  years. 

ANNUAL  AVERAGE  OF    OUTPUT  OF  GOLD  AND  SILVER  IN 
KILOS,  THE  RATIO  OF  PRODUCTION,  AND  THE 
COMMERCIAL   RATIO. 


Period. 

Production  of 
Gold. 
Kilos. 

Production  of 
Silver. 
Kilos. 

—  Proportion  i 
Gold  to—  Silver. 

Commercial 
Ratio.* 

1492—1520    

5  800 

47  OOO 

i  -8 

I      1O  74 

I?2I—  1?44.  .  . 

7  160 

go  200 

i  :  I2i 

I      11  25 

IC4S—  jc6o    .  ,r.  . 

8  mo 

311  600 

i  :s6| 

I      II.3O 

1561—1580    

6  840 

2QQ  5OO 

I  •  44 

I     II.5O 

1581-1600  

7  380 

418.000 

i  :  5&I 

I      II  80 

l6oi-l62O  

8  520 

422  900 

i  :48f 

I      12.25 

1621-1640  

8,^OO 

393,600 

i  :  47^ 

I      14. 

1641-1660  

8  770 

366,300 

i  :  4iJ 

I      14.50 

l66l-l68o  

Q  26O 

"}i7  OOO 

i  •  -361 

i    15  oo 

l68l—I7OO    

10  76? 

•341  QOO 

1  '  "M\ 

I     I5.OO 

I7OI-I72O  

12  82O 

"\*.*\  600 

I  -28 

I     15  2O 

1721-1760  

21  850 

482  ooo 

I  '  22 

I     I5.OO 

1761—1780  

2O  7O? 

6<?2  74O 

I  '  ^li 

I      14  60 

1781-1820  

I5,66o 

771.  ooo 

I  :  4Q 

I      I5.5O 

1821-1840  

I7,25O 

528,000 

i  :  3o£ 

I     15.75 

1841—1850  

CJ    TCQ 

780  4.1? 

i 
I  '  14* 

I      I5.8T 

1851-1860  

2OO  5OO 

80?  ooo 

i  :  4i 

I      15.40 

1861-1870  

IQ?  OOO 

I   22O  OOO 

i  :64- 

I      I?   "iO 

1871-1875  

IT*  QO4 

1,060.42? 

wT 
i  :  ill 

i    15-97 

1876-1880  

172  4IJ. 

2  4?O  2^2 

I  '  14-i- 

i    17  81 

1881-1885  

M9,I37 

2,86l,7OO 

i  :  rgi 

i    18.63 

*  From  Soelbeer's  Materialien. 


QUANTITY  NOT  AFFECTING  PRICES. 


29 


The  annexed  table  shows  more  closely  the  variations 
in  quantity-relations,  and  the  steadiness  of  values  during 
long  periods. 

A  great  revolution  in  relative  output  is  ushered  in  with 
the  discovery  of  the  gold  fields  of  America.  The  tables 
are  suddenly  reversed. 

In  the  thirty  years  following  1850  as  much  gold  was 
produced  as  in  the  357  years  beginning  with  1492,  and 
enough  in  addition  to  nearly  double  the  gold  finds  of  the 
two  first  centuries  after  the  discovery  of  America. 

The  ratio  by  quantity  for  the  decade  1851-60  was  I 
gold  to  4^-  silver;  for  1861-70  it  was  I  to  6£ ;  and  for 
1871-80,  when  gold  production  receded  again,  it  still 
averaged  I  to  I2|,  as  against  I  to  33,  and  even  I  to  56  in 
the  times  previous  to  the  large  gold  discoveries. 

Still  the  price  relations  of  the  two  metals  did  not 
change  perceptibly.* 

The  ratio  of  value  was  nearly  the  same  the  beginning  of 
the  seventeenth  century  as  at  the  end  of  the  fifteenth, 
although  the  production  of  silver  had  risen  from  8  (gold 
being  i)  to  56.  This  ratio  decreased  gradually  and 
reached  22  (to  I  of  gold)  in  1760.  But  the  price  of  silver, 

*  The  average  London  price  of  silver  in  pence  per  ounce  and  the  ratio  of 
silver  stood  as  follows  under  all  these  violent  changes  : 


Price  of  Silver 

QUANTITIES. 

per  ounce. 

Ratio. 
A  verage. 

Gold. 

Silver. 

Per  cent. 

Per  cent. 

1831  to  1840. 

59f 

15-75 

3-3 

96.7 

1841  to  1850. 

59i* 

15.83 

6.6 

93-4 

1851  to  1860. 

6iJ 

15-35 

18.3 

81.7 

1861  to  1865. 

6i± 

15.40 

14.4 

85.6 

1866  to  1870. 

6o| 

15-55 

12.7 

87.3 

1871  to  1875. 

59A 

15-97 

8.1 

91.9 

1876  to  1880. 

5a}| 

17.8l 

6.6 

93-4 

1881  to  1885 

5o& 

18.63 

5- 

95- 

MONEY  AND   PRICES, 


which  had  commenced  to  decline  in  the  beginning  of  the 
seventeenth  century,  was  not  raised  by  this  decrease. 
Quite  the  reverse.  In  1600  about  twelve  ounces  of  silver 
were  required  to  buy  an  ounce  of  gold;  in  1760  it  took 
fifteen  ounces.  Neither  does  the  rising  ratio  of  produc- 
tion up  to  1820  have  much  effect  on  the  price.  From 
1780  to  1820  we  have  an  annual  average  of  49  to  I  again. 
But  the  price  does  not  change  more  than  a  fraction. 

We  can  get  perhaps  a  better  conception  of  the  indiffer- 
ence of  the  price  of  silver  to  the  quantitative  changes  in 
the  two  metals,  which  took  place  during  the  three  decades 
succeeding  the  discovery  of  the  California  gold  fields, 
when  we  compare  the  output  by  values. 

Up  to  1840  the  output  had  been  : 


In  Gold. 

£590.000,000 


In  Silver. 
£1,361,000,000 


Relation  of  Gold 
to  Silver—. 

i:  2.31 


In  1880  the  totals  stood  : 


^1,454,000,000         .£1,789,000,000  i:  l-23 

There  was  but  half  as  much  silver  in  the  world,  in  rela- 
tion to  gold,  when  the  decline  in  the  price  of  silver  became 
a  prominent  feature  in  the  financial  history  of  the  world, 
as  in  the  first  half  of  the  century.  Since  then  the  out- 
put has  been  : 


In  Gold. 
£ 

In  Silver. 

£ 

Relation  of  Gold 
to  Silver. 

From  1881-1888  

148  ooo  ooo 

154  ooo  ooo 

I   I  04 

"      1889-1894  

176  ooo  ooo 

205  ooo  ooo 

I    1.  16 

"      1881-1894  

324  ooo  ooo 

359  ooo  ooo 

I   I   IO 

Adding,  up  to  1880.  .  .  . 

1,454,000,000 

1,789,000,000 

I  1.20 

Gives  a  grand  total  of.  . 
As  against  1850  of  

1,778,000,000 
667,000,000 

2,148,000,000 
1,428,000,900 

I  2.14 

Consequently     1850    to 
1894,   added  

I   III  OOO  OOO 

I  O  65 

ALTERED    RELATIONS.  3 1 

In  the  last  45  years  166  per  cent,  has  been  added  to 
the  gold  product  of  357  years  and  only  50  per  cent,  to  the 
silver  product,  which  was  then,  at  the  time  of  its  highest 
value,  more  than  twice  as  great  in  proportion  to  gold  as 
now,  the  time  of  its  lowest  value. 

If  the  relative  quantities  of  the  two  metals  produced 
determined  the  value,  then  the  price  of  silver  ought  now 
to  be  nearly  double  what  it  was  worth  in  1850.  Being 
worth  6od.  then,  it  ought  to  be  worth  I  lod.  now.  But  in 
fact,  it  had  gone  down  to  38^.  before  the  closing  of  the 
India  mint,  and  had  since  this  event  further  declined  to  a 
price  less  than  30^.  the  ounce. 

The  Real  Cause  of  the  Decline  in  the  Price  of  Silver. 

The  question,  Why  has  silver  fallen  so  low  in  price  ?  finds 
answer  by  bimetallists  in  what  they  call,  the  conspiracy 
to  demonetize  silver,  begun  and  directed  by  England,  and 
now  followed  by  all  the  leading  commercial  nations. 
They  say  :  If  all  nations  would  agree  to  the  free  coinage 
of  silver  at  a  certain  ratio,  then  silver  would  command  the 
full  value  it  held  before  the  decline.  Mr.  de  Cernuschi 
has  even  supplied  the  vocabulary  with  the  necessary 
"  scientific  "  terms.  "  Centripoise  "  and  "  centrivale  "  are 
to  express  the  two  values — the  value  determined  by  the 
economic  conditions  and  the  value  given  by  the  govern- 
ment stamp  upon  coin.  And  our  own  bimetallists  go  so 
far  even  as  to  say  that  America  can  give  this  higher  value 
to  a  depreciated  commodity  single-handed,  by  saying  this 
or  that  piece  of  silver  is  a  dollar,  when  its  real  value  in 
the  markets  of  the  world  is  but  60,  50,  or  45  cents,  as  has 
been  the  case  a  short  time  ago. 

We  may  ask  in  return :  Why  do  all  other  nations  with, 
draw  their  support  from  silver  ? 


32  MONEY  AND  PRICES. 

If  the  extreme  changes  in  the  rate  of  production  (com- 
paring the  time  prior  to  the  new  gold  finds,  and  the  period 
of  these  great  gold  discoveries)  did  not  change  the  value  of 
ratio,  it  is  safe  to  ask  why  should  silver  decline  in  price 
now  when  the  proportionate  production  of  silver  is  but 
even  with  that  of  gold,  and  the  output  of  the  latter 
exceeds  in  quantity  everything  the  world  has  ever  seen. 

The  answer  is  here.  If  we  take  the  ratio  of  production 
to  represent  also  the  relative  quantities  in  existence  at  the 
different  periods  named,  then  we  have  for  1850  for  every 
dollar's  worth  of  gold  about  two  and  one  eighth  dollars' 
worth  of  silver.  Much  of  the  silver  produced  up  to  then 
had  become  absorbed  in  the  arts,  sent  to  the  East,  or 
otherwise  removed  from  use.  But  so  had  much  of  the 
gold.  The  amounts  of  gold  and  silver  money  actually  in 
existence  are  estimated  by  competent  authorities  for  1800 
as  ;£  1 20,000,000  gold  and  ^260,000,000  silver  ;  for  1848, 
as  ;£  1 5  0,000,000  of  gold  and  ^"280,000,000  silver.  But  in 
1880,  ,£700,000,000  of  gold  and  .£490,000,000  of  silver 
were  in  existence,  according  to  the  best  authorities.  Neu- 
man-Spallart  estimates  the  gold  money  for  1889  as  about 
^800,000,000,  and  the  silver  money  of  about  the  same 
value.  Since  then  little  has  changed  in  the  relative  posi- 
tions of  supply  in  the  two  metals.  We  have  nearly  two 
dollars  of  gold  money  in  existence  for  every  dollar  of 
the  two  metals  combined,  circulating  in  1848.  In 
fact,  silver  was  scarce  as  a  money  metal,  relatively  more 
so  even  than  gold,  because  of  the  more  general  demand 
for  it.  It  was  the  circulating  medium.  Upon  the  conti- 
nent of  Europe  the  idea  of  money  was  closely  associated 
with  silver,  but  not  with  gold.  The  French  "  argent  " 
means  silver  and  money.  In  German,  "  versilbern  "  is  to 
the  present  day  equivalent  to  "  turning  into  cash."  The 


INCREASING  GOLD  SUPPLY.  33 

language  of  the  people  is  the  storeroom  of  history.  Silver 
was  the  circulating  medium,  and  the  standard.  The 
poorer  and  the  more  backward  the  nations,  the  bulkier 
the  substance  of  their  circulating  medium.  Even  copper 
coin  was  an  important  element  with  the  people  of  Con- 
tinental Europe  in  the  earlier  part  of  this  century,  but 

Silver  was  the  Money 

used  in  business  transactions.  The  Southern  German 
states  had  no  gold  coins  of  their  own  before  the  forma- 
tion of  the  new  Empire.  From  1831  to  1840  only  £28,- 
000,000  of  gold  was  produced  and  .£52,000,000  of  silver. 
This  is  still  nearly  two  to  one  of  silver  to  gold. 

But  from  1850  to  1880  the  very  opposite  current  ap- 
peared in  regard  to  production.  The  world  produced 
more  than  two  dollars'  worth  of  gold  for  every  dollar's 
worth  of  silver. 

The  increasing  output  of  silver  for  a  time,  seemed  to 
change  the  general  relations.  But  now  for  several  years 
again  the  output  of  gold  is  in  value  considerably  above 
that  of  silver,  if  we  take  the  commercial  value.  The  new 
gold  finds,  the  introduction  of  deep  mining,  and  the  ap- 
plication of  capitalistic  and,  therefore,  scientific  methods, 
where  formerly  only  crude,  individualistic  exploitation 
prevailed,  seem  to  readily  fill  the  demand.  The  world's 
output  of  1894  in  gold  is  estimated  at  $175,000,000,  the 
highest  average  on  record.  The  quinquennial  period  of 
1851-1860  gives  only  an  annual  average  of  $140,000,000. 

The  "  Witwatersrand "  mines  in  South  Africa  have 
developed  from  494,869  ounces  in  1890,  as  follows  : 

1891 729,238  ounces. 

1892 1,210,868   " 

1893 1,478,473   " 

1894 2,024.159 

3 


34  MONEY  AND  PRICES. 

as  reported  by  the  Economist  of  January  12,  1895.  The 
last  year's  figure  is  equal  to  two  thirds  of  the  American 
annual  average  for  1851-55.  Gold  production  has  added 
to  the  supplies  of  the  world  in  the  precious  metals  since 
1850  the  sum  of  .£1,111,000,000.  Silver  production  only 
.£720,000,000  (silver  taken  at  the  coinage  rate  of  15^ 
to  i). 

Silver,  being  relatively  scarcer  than  gold,  would  easily 
maintain  its  former  higher  price,  were  its  serviceability  as 
great  in  the  coinages  of  the  world  as  in  the  past. 

But  it  is  not  the  relatively  greater  or  smaller  quantity 
of  the  white  metal  in  existence  which  has  cast  it  from  its 
position,  but  the  abundance  of  gold  brought  into  use 
since  1848.  In  spite  of  all  the  endeavors  to  prove  the 
contrary,  there  seems  to  be  enough  gold  in  existence  to 
answer  the  purposes  of  exchange.  True,  there  is  always 
a  very  strenuous  endeavor  to  obtain  an  increase  in  the 
stocks  of  gold.  But  gold  seems  never  to  be  wanting, 
except  in  times  of  scare  and  waning  confidence  in  the 
stability  of  financial  conditions,  such  as  produced  the 
panic  of  1893. 

But  here  come  other  factors  in  view.  The  use  of  money 
is  not  as  great  as  it  has  been  in  trade.  Of  the  thousand 
million  dollars  of  coined  money  (gold  and  silver),  very 
little  appears  in  trade  in  America.  With  the  progress  of 
civilization  and  its  concomitants,  industrial  progress  and 
international  confidence  and  good-will,  the  importance  of 
metallic  money  as  a  means  of  payment  is  becoming 
smaller  and  smaller.  Metal  money  is  gradually  being 
superseded  by  less  expensive  substitutes.  In  the  ad- 
vanced countries  silver  has  outrun  its  usefulness.  The 
mere  fact  of  its  cumbersome  nature  would  declare 
against  it  as  the  standard  money  of  the  commercial  world. 


PRIMITIVE   CONDITIONS.  35 

The  History  of  the  Standards  of  Value. 

The  history  of  the  development  of  commerce  among 
nations,  from  the  ancient  to  the  present  world,  shows  that 
the  changes  of  standard  of  value  mark  the  progress  from 
a  lower  state  of  civilization  to  a  higher  one.  For  the 
Germanic  nations  as  well  as  for  the  Romans,  we  have  it 
recorded  in  the  name  that  their  earliest  measure  of  value 
was  cattle.  "  Fee,"  "  feoh,"  "  vieh,"  the  same  as  "  pecus," 
means  "  pecunia,"  money  (it  is  used  so  in  old  German 
chronicles),  as  "  peculia,"  means  peculiar,  individual  prop- 
erty, as  distinguished  from  landed  property,  which  among 
all  primitive  nations  is  property  of  the  community.* 

This  is  true  not  alone  among  the  Indo-Germanic  races, 
but  among  nations  of  the  most  varied  types.  The  hold- 
ing and  cultivation  of  land  in  common  was  found  among 
the  American  Indians,  among  the  Malays,  among  the  ar- 
chaic races  which  occupied  Italy  before  the  Roman  period, 
as  well  as  among  the  Slavs,  the  Chinese,  and  Hindoos,  f 

*  How  deep  the  commonalty  of  land  and  its  cultivation  in  common  was 
rooted  in  the  German  people  is  proved  by  the  fact  that  even  in  the  towns 
the  lands  were  so  held  by  the  burghers.  The  free  towns,  the  great  commer- 
cial emporiums  of  the  middle  ages,  held  large  tracts  of  land,  and  a  large 
part  of  their  population,  in  many  the  larger  part,  obtained  their  living  from 
the  land.  In  Frankfort-on-the-Main  the  burghers  had  common  rights  not 
alone  in  the  grazing  lands  and  forests  but  also  in  the  fields,  which,  as  we 
read  in  an  ordinance  of  the  town  council  of  the  year  1504,  had  to  lie  fallow 
every  third  year.  "  But  not  alone  concerning  the  common  mark,  but  also 
concerning  private  holdings  in  many  towns,  the  town  councils  ordered  how 
to  cultivate  the  land,  how  to  plow  and  to  till,  how  to  cultivate  the  fallow,  to 
plant  trees,  cut,  tie,  and  trim  the  vines,  prop  them,  and  the  like."  See  G. 
L.  von  Maurer,  Geschichte  des  Staedte  Verfassung  in  Dcutschland ;  also 
Johannes  Janssen,  Geschichte  des  deutschen  Volkes  bei  dem  Ausgang  des  Mit- 
telalUrs,  vol.  I. 

•f  See,  for  full  particulars,  Emile  de  Laveleye's  important  work,  De  la 
Propritte  et  des  ses  Formes  Primitives.  Also  the  works  of  Sir  Henry  Maine, 
Village  Communities,  Ancient  Law,  etc. 


36  MONEY  AND  PRICES. 

The  traces  of  this  common  property  in  land  arc  found 
to  the  present  day  in  Germany  and  in  Switzerland,  in 
the  still  existing  "  Gemeindeacker,"  "  Gemeindeweide," 
and  "  Gemeindeforst  "  (the  communal  acre,  the  communal 
pasture,  and  the  communal  forest).  In  this  the  present 
writer  remembers  from  his  boyhood  the  burghers  of  his  own 
town  (Oppenheim  on  the  Rhine)  to  have  had  their  allot- 
ments. The  existence  of  a  peculium  implies  that  a  step 
forward  has  been  made  in  civilization.  It  implies  that 
trade  of  a  certain  kind  is  possible,  that  interchangeable 
values  and  commodities  are  created.  Now  it  is  quite 
evident  that  animals  of  the  size  and  value  even  of  the 
inferior  kinds  bred  on  the  grazing  lands  and  in  the  forests 
of  ancient  Germany  or  other  undeveloped  countries  *  are 
not  a  sort  of  money  taken  to  fairs  and  markets  to  be  ex- 
changed for  whatever  could  be  had  from  the  conflux  of 
itinerant  or  post  traders  of  the  Roman  settlements. f  But 
from  the  records  in  the  ancient  laws  we  can  easily  see 
that  this  "  pecunia  "  was  used  as  a  money  of  account  to 
compute  values  by  and  effect  settlements  on. 

When  the  migration  of  nations  had  merged  into  a  set- 
tled state  on  the  territories  which  the  European  nations 
now  occupy,  the  conquerors  adopted  the  garb  of  the 

*  We  know  that  cattle  were  used  in  the  same  sense  as  money,  or  as  stand- 
ard of  payment  by  the  old  Persians,  by  the  Homeric  Greeks,  and  the  fact 
that  the  picture  of  an  ox  is  found  on  the  coins  of  pre-Solonic  Athens  is  a 
sure  indication  that  tradition  still  connected  the  idea  of  money  with  cattle. 
"  Fe  "  (the  same  as  "  Vieh,"  the  German  for  cattle)  is  still  to-day  in  Iceland 
the  expression  equivalent  with  property  or  money. 

f  Commerce  goes  back  to  the  very  earliest  periods.  Traces  of  an  active 
trade  are  found  in  places  where  no  Roman  settlements  were  ever  made. 
Important  contributions  to  our  knowledge  on  this  subject  are  made  by  Pro- 
fessor Dr.  J.  Schneider,  from  his  own  personal  examinations,  Die  alien 
Heer-  und  Handelswege  der  Germanen,  Roemer  und  Franken  im  deutschen 
Reiche. 


MONETARY  SYSTEM  OF   THE  FRANKS.  37 

civilization  which  they  had  overthrown,  and,  of  course,  the 
monetary  system  as  part  of  it. 

That  the  Salian  Franks,  who  had  conquered  Gaul  had 
in  use  the  Roman  monetary  system  is  proved  by  the  many 
gold  coins  in  our  collections,  bearing  the  Merovingian 
stamp,  which,  in  grain  and  fineness,  as  well  as  in  general 
type,  fully  correspond  with  the  contemporary  imperial 
solidus.  "  As  the  Roman  pound  of  gold  weighed  about 
327  grammes,  the  metal  contained  in  the  solidus  was  4^ 
grammes."  *  The  pound  was  72  solidi  of  the  exact  weight 
of  4.55  grammes  each,  making  the  pound  327  grammes. 

The  German  nations  on  the  right  bank  of  the  Rhine,  as 
evidenced  by  the  Ripuarian,  Bajuvarian,  and  other  Ger- 
man Codici,  and  later  on,  the  Capitularies  of  the  Carlo- 
vingian  kings,  adopted  the  Prankish  money  standard  at  a 
period  quite  too  undeveloped  to  allow  us  to  suppose  that 
an  actual  monetary  traffic  could  have  existed. 

"  The  importance  of  the  monetary  system  of  that  time  does  not  lie  in  its 
employment  as  a  means  of  payment  and  exchange,  but  in  its  application  to 
the  calculation  of  the  values  of  marketable  commodities." 

"  At  least  with  the  tribes  of  interior  Germany,  money  was  certainly  for  a 
long  period  only  money  of  account,  explained  by  the  fact  that  commercial 
transactions,  which  require  metal  money,  were  of  too  rare  an  occurrence  to 
call  forth  an  active  demand  for  coins.  By  this  almost  exclusive  use  of 
money  as  an  accounting  medium,  the  peculiar  system  of  determining  values 
which  we  find  among  the  Germans  becomes  comprehensible.''! 

Trading  was  done  in  kind,  as  up  to  a  comparatively  re- 
cent period,  taxes,  rents,  and  feudal  dues  were  paid  in 
produce.  Cattle  formed  the  basis  for  computation.  The 
"  Wergeld,"  the  compensation  for  murder,  theft,  or  other 
injuries,  is  stipulated  in  heads  of  cattle  in  the  codes  of  the 

*  See  Inama-Sternegg,  Deutsche  Wirthschaftsgeschichte  bis  zum  Schluss 
der  Karolingerzeit^  vol.  i. 
f  Inama-Sternegg,  Ibid. 


38  MONEY  AND  PRICES. 

more  ancient  times.  Only  after  contact  with  the  Prank- 
ish monarchies,  the  Roman  money  takes  the  place  of  cat- 
tle in  legal  computations.  Till  we  come  to  a  regular 
commercial  trading  system,  in  which  money  becomes  the 
means  of  payment,  a  money  economy,  many  a  century 
has  to  elapse  from  the  time  we  are  speaking  of  here. 

In  the  periods  of  transition  from  a  system  of  barter  and 
payment  in  kind  to  a  money  economy,  the  cheaper,  more 
common  metals,  are  used.  Their  use  denotes  a  low  state 
of  commercial  and  industrial  development.  The  iron 
money  of  Sparta,  the  copper  as  of  Rome,  the  copper  cur- 
rencies of  the  middle-age  period  (this  comprises  very  re- 
cent periods,  so  far  as  the  smaller  traffic  and  wage-pay- 
ments go)  of  modern  Europe,  all  denote  a  similar  state  of 
development,  or  rather  undevelopment.  The  silver  stand- 
ard took  the  place  of  copper  with  the  rise  and  extension 
of  trade.  Rome's  copper  currency  seems  to  have  held 
itself  till  the  middle  of  the  third  century  B.C.,  as  long 
as  Rome  contented  itself  with  extending  its  dominion 
over  Italy.  It  put  into  its  treasury  from  the  triumph 
over  the  Samnites  (293  B.C.)  2,000,000  pounds  of  copper ; 
in  silver,  only  1330  pounds.  In  194  B.C.,  shortly  before 
the  first  Punic  war,  it  adopted  the  silver  standard.  But 
with  the  beginning  of  the  imperium  under  Caesar  and 
Pompey,  the  gold  standard  appears.  With  the  great  rise 
of  power,  practically  extending  over  the  civilized  world, 
directing  the  world's  economic  and  political  pulsation,  the 
more  efficient  gold  standard  had  to  take  the  place  of  the 
cumbersome  white  metal.  The  solidus  replaces  the  de- 
narius, just  as  the  denarius  replaced  the  as,  all  in  their 
proper  time  and  when  their  mission  had  been  fulfilled. 
Good  enough  for  a  provincial  or  even  an  isolated  national 
existence,  silver  was  found  insufficient  for  a  world-empire. 


PROGRESSIVE  MONEY  METALS.  39 

And  what  is  trade  but  man  grasping  the  poles  in  his  am- 
bition ! 

Macedonia  began  coining  gold  as  soon  as  its  ambition 
reached  beyond  its  own  confines.  And,  in  fact,  we  find 
this  the  case  with  all  the  ancient  monarchies. 

The  wide  circulation  of  gold  coins  makes  it  imperative 
to  preserve  not  alone  this  standard,  but  also  the  effigy  of 
the  ruler  whose  name  has  gone  farthest  among  the  civil- 
ized and  semi-civilized  nations  reached  by  commerce. 
The  Persian  Darius  and  the  Macedonian  Philip  and  Alex- 
ander pieces  circulated  centuries  after  the  periods  of  these 
great  rulers,  and  were  found  far  beyond  the  limits  of  their 
empires,  an  advantage  not  shared  by  coins  subject  to 
frequent  changes.  Stability  in  fineness,  weight,  shape, 
and  device  is  essential  to  a  commodity  which,  as  money, 
is  to  circulate  without  question  among  heterogeneous 
peoples.  Egypt  and  the  Saracen  states  in  the  middle 
ages,  in  the  period  of  their  greatest  power,  had  the  gold 
standard.  The  circulation  of  their  coins  seems  to  have 
extended  pretty  far  over  Europe,  as  is  attested  by  the  fact 
(see  Falke,  GescJdchte  des  deutschen  Handels)  *  that 
the  Numismatic  Cabinet  at  Stockholm  contains  20,000 
Arabic  gold  coins.  And  gold  coins  were  not  circulated  so 
much  as  they  were  hoarded  among  the  barbarous  nations 
of  Europe,  even  after  trade  and  industry  had  developed. 
Copper  and  silver  were  with  them  the  paying  mediums, 
sufficient  for  their  stage  of  civilization.  It  is  no  idle  fancy 
that  ascribed  magic  qualities  to  gold  in  the  middle  ages. 
The  magic  lay  in  the  difficulty  of  realization,  of  posses- 
sion. He  who  could  make  gold,  possessed  the  elixir  of 
life  :  the  elixir  of  life  of  trade.  It  is  therefore  natural  that 
what  nations  had  found  this  elixir,  took  to  a  gold  cur- 

*  $ee  Roscher,  Grundlagen  der  National  Oekonomie,  vol.  Hi.,  §.  47, 


40  MONEY  AND  PRICES. 

rency  because  none  other  possessed  the  quality  of  insuring 
a  continuous  flow  of  life  to  the  trade  extending  over  the 
countries  of  the  world.  You  cannot  carry  silver  from 
Bagdad  to  Paris  or  Lyons,  or  from  Cordova  to  Hydera- 
bad, or  from  Florence  to  Novgorod,  or  from  Bruges  to 
Constantinople,  in  quantities  sufficient  to  make  a  trade 
worth  the  trouble,  or  to  use  it  whenever  you  have  to  make 
money  payment.  The  bulk  is  sufficient  to  forbid  large 
transactions,  especially  in  periods  like  the  middle  ages, 
with  roads  and  means  of  travel  alike  defective  and  full  of 
risk  to  life  and  property.  Well  adapted  for  provincial 
and  interior  trading,  silver  becomes  an  awkward  medium 
to  do  service  in  the  markets  of  the  world.  Wherever  and 
whenever  it  was  the  standard  of  payment,  it  marks 
a  period  of  "  medio  evo,"  a  middle  age,  a  period 
of  unripeness,  of  exclusive  provincialism  and  separateness. 
When  the  Italian  cities  had  grown  to  independence  and 
thrown  off  the  yoke  of  feudalism,  they  quickly  stepped  in 
to  take  the  reins  of  the  world's  trade  from  the  fading 
Califate  and  decaying  Byzantium,  and  followed  their 
lead  in  adopting  the  gold  standard.  Venice,  Genoa, 
Florence,  coined  gold  and  made  their  payments  on  the 
gold  standard  as  far  back  as  the  thirteenth  century.  The 
gold  florin,  the  coin  of  Florence,  soon  became  the  com- 
mercial money  of  Europe,*  on  account  of  its  widely  known 

*  Sismondi  is  authority  for  the  statement  that  the  gold  florin  of  Florence, 
dating  from  the  year  1252,  never  changed  its  coinage  weight,  while  the  sil- 
ver lira  underwent  very  great  changes.  It  was  coined  at  first  especially  for 
the  Mohammedan  countries,  but  soon  became  the  standard  money  for  inter- 
national trading.  The  same  can  be  said  of  the  gold  coins  of  other  countries, 
which  were  hardly  used  at  home,  but  circulated  abroad,  as  the  French  gold 
coins  up  to  1748  in  Switzerland,  Germany,  and  Italy,  and  the  Dutch  ducats. 
No  foreign  coins  could  circulate  unless  they  had  acquired  and  maintained  a 
high  reputation  for  honesty  and  the  veracity  of  the  legend.  Unchallenged 
circulation  in  foreign  countries  is  the  best  test  of  the  full  value  of  coins. 


SILVER  HIGHLY    VALUED.  4! 

high  character ;  and  the  Florentine  traders  became  the 
bankers  of  the  world.  Without  a  gold  currency  they 
would  have  remained  the  provincial  traders  which  the  de- 
scendants of  the  Medici,  the  Pazzi,  the  Aridi,  became 
again  after  the  spirit  that  built  the  cities  on  the  Arno 
and  the  Po  had  taken  its  flight.  Another  reason  of  the 
great  preference  given  to  gold,  beside  its  smaller  bulk,  /'.  e.t 
higher  value,  is,  that  the  coins  cannot  so  easily  be  tam- 
pered with.  Without  a  staple  currency  trading  communi- 
ties cannot  maintain  their  positions.  As  far  back  as  the 
fourteenth  century,  the  commercial  cities  of  Germany 
made  bills  payable  in  gold,  and  in  the  seventeenth  cen- 
tury the  rule  had  wellnigh  been  universally  adopted  all 
over  Europe. 

The  saying  of  the  elder  Mirabeau  in  La  Monarchic 
Prussienne,  "  One  can  not  gain,  one  can  only  steal,  a 
profit  from  the  coinage,"  is  very  appropriate  when  we 
regard  the  different  games  that  were  at  different  times 
played  with  the  currencies  of  Europe.  It  is  superfluous 
to  explain  in  words  why  gold  is  less  subject  to  the  invidi- 
ous attempts.  It  suffices  to  say  that  it  has  at  all  times 
been  the  safe  basis  upon  which  the  world's  commerce  has 
rested,  and  therefore  this  brief  historic  sketch  may  not  be 
without  its  useful  application  to  the  conditions  now  sur- 
rounding us. 

It  may  also  be  of  use  to  call  attention  to  the  fact  that 
the  high  valuation  of  silver,  as  compared  with  gold,  has 
been  usual  with  countries  in  a  backward  state,  and  that, 
reversely,  a  lower  valuation  is  the  sign  of  a  more  advanced 
civilization.  This,  to  a  very  large  extent,  is  owing  to  the 
fact  that,  in  undeveloped  countries,  silver  is  the  chief  cur- 
rency, and  therefore  in  constant  demand,  on  account  of 
the  limited  monetary  transactions,  Jt  is  the  economic 


42  MONEY  AND  PXICES. 

and  industrial  condition  which  governs  the  demand,  and 
not  the  fiat  of  legislators  and  rulers. 

Tacitus  says  that  the  German  people  had  neither  silver 
nor  gold  previous  to  their  contact  with  Rome.  Of  those 
who  had  entered  into  relations  with  the  Roman  settle- 
ments he  adds  :  "  They  aim  more  after  silver  than  gold, 
not  from  preference,  but  because  a  number  of  silver  pieces 
are  more  convenient  in  making  a  trade  in  promiscuous 
and  inferior  articles  of  merchandise."  (Tacitus,  Germa- 
-yia,  ch.,  v.) 

According  to  Roscher,  in  the  time  of  Nadir  Shah 
(1750),  the  Kurds  gave  weight  for  weight,  silver  for  gold. 

In  India,  at  the  time  of  Alexander's  invasion,  silver  to 
gold  was  valued  as  I  to  2.  But  in  consequence  of  the 
widening  of  commerce,  brought  on  by  it,  the  ratio  soon 
reached  I  to  5  or  6.*  In  Athens,  when  she  was  at  the 
zenith  of  her  glory  and  power,  the  ratio,  according  to 
Herodotus,  was  13  to  I.  The  Rome  of  the  undeveloped 
era,  in  189  B.C.,  left  it  optional  with  the  ^Eolians  to  pay 
their  tribute  in  silver  or  gold,  at  the  weight  ratio  of 
10  to  i. 

In   the  middle  ages   silver   had  a  much  higher  value 

*  "  When  Vasco  da  Gama  rounded  Cape  Horn,  the  new-comers  first 
plundered  the  coasts  ;  but  finding  that  their  brigandage  aroused  sufficient 
resistance  to  render  it  dangerous,  they  began  to  trade,  at  first  by  exchanging 
their  stolen  silver  for  gold  at  the  Indian  ratio  of  6  to  8  for  I.  In  Bombay, 
in  1774,  the  legal  ratio  was  nearly  15  to  I  ;  in  1800  :=  15  to  I. 

"  In  Kordofan,  between  Darfoor  and  the  Nile,  thirty  years  ago,  the  trade 
in  gold  was  monopolized  by  the  Pasha,  but  gold  was  sold  clandestinely  at 
the  rate  of  $8  in  silver  for  430  grains  of  fine  gold.  In  Shoa,  nine  silver 
dollars  were  paid  per  ounce  troy  of  fine  gold."  (The  ounce  of  gold  is  worth 
nearly  $20  in  coinage  value  of  silver.) — Alexander  Del  Mar,  A  History  of 
Money.  Quite  in  keeping  with  these  facts  may  be  quoted  the  statement 
from  Kilter's  Erdkunde  that  in  Africa  gold  stands  the  lower,  compared 
to  silver,  the  farther  the  country  is  from  contact  with  the  civilized  world. 


PRIMITIVE   CIl'ILIZATIOKS.  43 

Compared  with  gold  than  in  the  later  centuries.  In  the 
Carlovingian  period,  the  Roman  ratio  of  12  to  I  still  pre- 
vailed. But  this  soon  gave  way  to  a  higher  value  of  silver. 
Besides  this,  the  ratio  varied  yearly  from  one  country  to 
another.  In  England,  from  1104  to  1227  A.D.,  according 
to  Th.  Rogers,  the  ratio  was  9  to  I  ;  in  1257  I  find  it 
quoted  at  9.10  to  I.*  In  1292  it  is  quoted  as  12.6  of  silver 
to  i  of  gold,  f  But  it  has  to  be  remembered  that  this  is 
the  price  paid  for  gold  by  the  goldsmith.  Gold  had  no 
circulation  as  money.  Henry  III.,  in  1257,  struck  the 
first  English  gold  coins,  the  gold  pennies.  He  could  not 
get  them  into  circulation  despite  his  stringent  ordinances 
that  made  them  legal  tenders.  England's  commerce  was 
in  too  backward  a  state  to  require  such  costly  currency. 
A  hundred  years  later,  in  1344,  when  England  had  be- 
come somewhat  more  progressive,  Edward  III.  had  no 
difficulty  in  getting  gold  coins,  the  rose  nobles,  into  circu- 
lation. 

In  Florence  the  relation  of  silver  to  gold  in  the  coinage 
was  as  lOiJ-  and  n  to  I,  with  some  extreme  variations  in- 
terspersed, in  the  long  period  of  250  years,  from  1252  to 
the  end  of  the  fifteenth  century. 

In  Germany,  in  the  limited  transactions  in  which  gold 
and  silver  came  into  play,  from  the  middle  of  the  eleventh 
to  the  middle  of  the  thirteenth  century,  the  ratio  touched 
as  low  as  8  and  ran  as  high  as  n  and  12  to  \.\  In  the 

*  See  W.  A.  Shaw,  The  History  of  Currency. 

f  In  1344  we  find  it  again  at  11.04  ',  in  r34o  at  11.50  ;  in  1353  at  11.15  '• 
in  1412  at  10.33,  an(l  in  1464  at  11.15. 

J  Inama-Sternegg,  Deutsche  Wirthschaftsgeschichte,  gives  a  number 
of  payments  made  in  gold  and  in  silver  as  well  as  ordinances,  making  it  com- 
pulsory to  pay  partly  in  gold  and  partly  in  silver.  The  transactions  as  well 
as  the  agreements  are  all  based  on  weight,  and,  consequently,  by  stating 
the  relative  quantities  we  are  informed  how  one  metal  was  valued  by  another 


44  MONEY  AND  PRICES. 

beginning  of  the  seventeenth  century  the  ratio  was  12.16 
to  i.  In  Flanders,  however,  it  was  13.22,  and  in  England 
13.5  to  i. 

No  common  ratio  existed,  and  with  one  country's  hand 
on  the  throat  of  another,  each  imagining  its  salvation 
depending  on  the  spoiling  of  the  other,  none  could  very 
well  exist.  A  common  ratio  means  mutual  confidence 
and  good-will,  and  this  was  not  a  distinguishing  feature 
of  the  statecraft  of  the  time.  These  differences  gave 
cause  to  very  grave  disturbances  in  the  monetary  situa- 
tion. The  exportation  of  the  undervalued  metal  was  a 
natural  consequence,  endeavored  to  be  prevented  by 
summary  laws.  It  availed  little  that  the  hangman  occa- 
sionally exercised  his  ofHce.  The  true  remedy  of  an  inter- 
national agreement  or  of  a  single  standard  was  not  even 
within  the  comprehension  of  the  times.  The  frequent 
alterations  in  the  coins  and  declarations  of  their  values 
were  endeavors  to  find  correctives  for  evils  which  were 
too  patent  not  to  be  made  the  subject  of  remedial  action. 
That  these  conditions  resulted  in  curtailing  the  circulation 
still  more  than  was  occasioned  by  the  general  monetary 
situation  of  the  times,  is  too  evident  to  need  more  than 
passing  mention. 

in  different  times  and  places.  Occasionally  the  ratio  of  12  to  I  is  met  with, 
but  generally  the  ratio  of  ro  to  I  is  found  in  computations  of  the  tenth, 
eleventh,  and  twelfth  centuries,  dealing  with  the  two  metals. 


CHAPTER  III. 

The  Demonetization  of  Silver  a  Result  of  Economic  Development. — The 
Positions  of  the  Two  Metals :  Past,  Present,  and  Prospective. — The  Real 
Standard  of  Payment  not  in  Coins. — The  Money  of  Account  the  Actual 
Measure  of  Payment. — Maintains  itself  Independently. 

Gold  and  Silver.     Production  and  its  Cost. 

WHATEVER  the  influence  of  the  cost  of  production  on 
the  supply  of  a  commodity  in  general,  it  cannot  at  all  be 
said  that  it  would  be  determining  in  regard  to  the  produc- 
tion of  silver  and  gold  because  of  the  generally  overlooked 
quantity,  the  adventurous  spirit  in  search  after  gain.  The 
production  of  gold  has,  on  the  whole,  hardly  paid  the 
average  of  wages  ruling  in  Australia  and  in  America.  The 
fortunes  made  by  the  few  are  balanced  by  the  disappoint- 
ment of  by  far  the  greater  number.  The  hope  of  good 
luck  keeps  up  the  search  even  in  the  face  of  loss  of  savings 
brought  from  other  occupations  into  the  mining  camp. 
Gold  mining,  which  receives  the  greatest  yield  from  in- 
dividual effort,  keeps  all  the  adventurous  faculties  keenly 
on  the  scent.  It  has  been  added  to  largely  of  late  by 
deep  mining.  From  these  combined  sources  larger  and 
larger  yields  are  flowing,  sufficient  to  keep  the  reserves 
increasingly  supplied,  without  subjecting  the  value  to 
very  great  changes. 

The  gold  of  the  South  African  regions  is  mostly  obtained 
from  deep  mining.  These  mines,  only  lately  added  to 

45 


46  MONEY  AND  PRICES. 

the  fields  of  productiveness,  yield  now  about  one  fourth  of 
the  annual  output.  Capital  has  largely  come  into  play  as 
a  factor,  superseding  in  a  sense  the  adventuring  gold- 
digger.  Under  capitalistic  exploitation  abandoned  fields 
are  recovered,  and  in  places  where  layers  are  suspected, 
shafts  are  sunk  and  gold  is  obtained  in  large  and  paying 
quantities.  Under  these  conditions  America  is  also  yield- 
ing considerably  increased  quantities.  The  quantity  for 
1894  is  estimated  at  42  million  dollars,  while  in  1893  the 
yield  was  but  36  millions.  The  last  six  years  show  the 
gold  product  of  the  world  to  have  been  : 

World's  Product  of  Gold. 

Fine  ounces. 

1889 5,973,780  $123,489,200 

1890 5,749,320  120,465,300 

1891 6,320,195  130,650,000 

1892 7,O77, 165  146,297,600 

1893 7,605,904  I57,228,IOO 

1894* 8,420,000  174,000,000 

The  heaviest  output  of  gold  ever  reached  before  this 
new  era  was  during  the  five  years  1856-60.  Then  the 
annual  average  was  6,486,262  ounces,  $135,000,000.  The 
present  output  overtops  this  average  by  about  30  per 
cent.  The  average  for  the  five  years  ending  with  1894,  is 
larger  by  nearly  10  per  cent,  than  that  of  the  five  years 
1856-60. 

It  is  impossible  to  say  what  the  future  of  gold  mining 
will  be.  One  thing,  however,  is  certain,  that  capital  sunk 
in  an  enterprise  cannot  be  withdrawn  at  will.  A  gold 
digger  carries  his  capital  on  his  back  and  his  machinery  on 

*  Estimated. 


PROSPECT  OF  GOLD  PRO&UCTION.  47 

his  shoulders.  He  can  transfer  these  easily  to  any  locality, 
and,  if  the  new  field  does  not  yield  more  than  the  one  he 
abandoned,  he  can  bury  his  disappointment  in  a  change 
of  occupation.  But  shafts  have  to  remain  where  they  are 
sunk,  and  only  lead  to  further  investment  until  the  last 
ton  of  quartz  is  extracted  and  the  last  dollar  is  expended 
and  the  shares  are  extinguished,  whatever  the  promises  of 
the  prospectus.  The  expectant  Midas  is  gulled  over  and 
over  again.  But  whether  he  falls  with  the  thousands 
buried  on  the  road  of  expectation  or  wins  a  prize  in  the 
great  lottery,  the  gold  itself  shows  no  trace  of  the  emo- 
tions that  its  birth  evokes.  It  takes  its  place  in  the  money 
stocks  of  the  world,  whether  the  cost  of  production  per 
ounce  is  ^"3  ijs.  lod.  (the  mint  price),  £i,  or  £7.  From 
what  we  know  of  the  European  gold  finds,  we  can  ven- 
ture to  say  that  rivers  and  valleys  are  by  no  means 
exhausted  treasure  stores. 

The  best  authorities  hold  that, 

"  By  the  disintegration  and  crumbling  away  of  the  rocks  which  contain 
the  auriferous  veins,  the  contents  of  these  are  swept  down  to  lower  levels, 
and  the  gold  by  its  density  always  seeks  the  lowest  places  among  the  moving 
materials.  The  auriferous  gravel  deposits  in  alluvial  formations,  the  golden 
sands  of  the  rivers  are  thus  produced,  and  have  been  gathering  for  long  ages 
past,  and  forming  deposits  out  of  reach  of  such  agencies. 

This  process  of  disintegration  has  certainly  been  going 
on  some  hundreds  of  thousands  of  years,  and  the  river 
beds  and  valleys  have  been  depositories  of  gold  from  time 
immemorial.  But  the  search  after  gold  dates  but  a  few 
thousand  years  back.  The  gold  hunters  never  went  deeper 
than  the  surface. 

As  a  fact,  Germany  and  Austria,  the  oldest  gold  pro- 
ducing countries  of  Europe,  furnish  to-day  not  less  than 
$3,000,000  of  wash  gold  annually.  This  is  not  a  very 


48  MONEY  AND  PRICES. 

great  sum  compared  with  the  present  (1894)  product  of 
some  $175,000,000.  But  it  is  an  important  figure  when 
we  consider  that  the  annual  average  production  from  1492 
to  1520,  according  to  Soetbeer,  did  not  exceed  the  sum  of 
$4,000,000.  The  average  for  the  period  beginning  with 
1521  and  ending  with  the  sixteenth  century  was  but 
$5,000,000  a  year.  The  greater  part  of  this  came  from 
the  New  World.  The  auriferous  rivers  of  Germany  and 
Austria-Hungary  produce  therefore  from  three  fourths  to 
three  fifths  as  much  gold  at  present  as  was  supplied  by 
the  whole  world  (annually)  more  than  a  century  after  the 
discovery  of  America. 

More  readily  accessible  and  economically  more  produc- 
tive means  may  be  found  in  the  newer  development  in  the 
gold-mining  industry,  but  the  existence  of  gold  in  inex- 
haustible quantities  is  more  than  conjecture. 

If  man  does  not  grow  too  wise  to  waste  his  energies  on 
the  finding  of  a  symbol  for  wealth,  and  does  not  confine 
himself  to  providing  the  articles  which  diffuse  comfort 
and  well-being,  settling  accounts  by  means  less  wasteful 
than  the  present,  the  search  for  gold  need  not  certainly 
be  abandoned  because  of  the  exhaustion  of  the  stores 
of  mother  earth. 

The  Silver  Product. 

Silver  is  not  found  in  alluvial  deposits.  It  can  only  be 
obtained  by  mining,  and  the  investment  of  capital  becomes 
therefore  a  necessity.  The  old  process  of  separating  the 
metal  in  the  ore  was  by  smelting.  The  Peruvians  and 
Mexicans  were  acquainted  with  this  method  and  employed 
portable  furnaces.  Scattered  over  a  great  surface  on 
account  of  the  difficulty  in  obtaining  fuel,  the  fires  blaz- 


SILVER  PRODUCTION.  49 

ing  in  Peru  attracted  the  attention  of  the  Spaniards  and 
puzzled  them.  The  discovery  of  the  silver  mines  of 
Guanajuato  and  of  Potosi  would  not  have  benefited  the 
world  much  had  it  not  been  for  the  timely  discovery  by 
Medina  in  1557  of  the  process  of  amalgamation.  The 
difficulty  of  obtaining  fuel  at  a  convenient  distance  from 
the  richer  mines,  mostly  situated  in  high  altitudes,  would 
have  made  the  employment  of  capital  too  hazardous. 
The  easier  supply  of  mercury  at  a  reduced  cost  helped 
not  a  little  in  promoting  the  progressive  yield  of  silver.* 

The  cost  of  obtaining  the  metal  even  by  the  method 
of  amalgamation  was  very  high.  The  working  system 
was  as  crude  as  it  possibly  could  be.  The  description 
which  Alexander  von  Humboldt  gives,  leaves  it  in  doubt 
whether  any  progress  had  been  made  in  the  two  hundred 
and  fifty  years  from  the  opening  of  the  mines  to  the  time 
of  his  visit. 

An  idea  of  the  difference  in  cost  of  production,  past  and 

*  The  Almaden  mines,  mortgaged  to  and  controlled  by  the  Fuggers  from 
1525  to  1645,  were  more  fully  exploited  and  produced  in  greater  abundance. 
Under  free  competition  with  the  quicksilver  from  the  Istrian  mines  a  much 
lower  price  could  have  been  obtained.     But  under  the  Spanish  government 
few  of  nature's  gifts  were  permitted  to  become  unalloyed  blessings.     The 
court  of  Madrid  as  late  as  the  end  of  the  last  century  reserved  to  itself  the 
exclusive  right  of  selling  mercury,  made  its  own  price,  and  allowed  only  a 
certain  quantity  of  foreign  mercury  to  be  imported.     Possibly  to  secure  to 
himself  a  part  of  the  profits  from  so  promising  a  monopoly,  "  the  minister, 
Don  Antonio  Valdes,  conceived  the  whimsical  and  audacious  project  of 
regulating  from   Madrid  the  distribution  of  mercury  among  the  different 
mines  of  Mexico  "f  ;  and  for  the  purpose  of  its  execution  he  ordered  the 
viceroy  in  1789  to  draw  up  statistical  tables  of  all  the  mines  of  New  Spain, 
and  to  send  to  Europe  specimens  of  the  veins  which  were  worked.     Of 
course  the  project  failed  because  the  viceroy  found  in  the  slow  Spanish 
method  a  safe  ally.     "  Not  a  single  specimen  was  ever  sent  to  Madrid."  \ 

f  Alexander  von  Humboldt,  Etsai  Politique  sur  le  Royauwe  tie  la  Noufclle  Espagne, 

*  Ibid. 

4 


§0  MOMMY  AMD  PRICES. 

present,  may  be  formed  when  we  notice  the  process  by 
which  the  bulk  of  the  product  was  obtained  in  the  richest 
silver  mines  of  the  world,  as  found  in  operation  by  Alex- 
ander von  Humboldt,  and  in  operation  up  to  our  time 
in  all  mines  except  those  operated  by  new  capital 
companies. 


"Subterranean  geometry  was  entirely  neglected  and  no  plans  were  in 
existence  of  the  works  already  executed.  Two  works  in  that  labyrinth  of 
cross  galleries  and  interior  shafts  may  happen  to  be  very  near  one  another, 
without  its  being  possible  to  perceive  it.  Hence  the  impossibility  of  intro- 
ducing, in  the  actual  state  of  most  of  the  mines  of  Mexico,  wheeling  by 
means  of  barrows  or  dogs,  and  an  economic  disposition  of  the  places  of 
assemblage.  A  miner  brought  up  in  the  mines  of  Freiberg,  and  accustomed 
to  see  so  many  ingenious  means  of  conveyance  practised,  can  hardly  conceive 
that  in  the  Spanish  colonies,  where  the  poverty  of  the  ores  is  united  to  a 
great  abundance  of  them,  all  the  metal  which  is  taken  from  the  vein  should 
be  carried  on  the  backs  of  men.  The  Indian  tenateros,  who  may  be  con- 
sidered as  the  beasts  of  burden  of  the  Mexican  mines,  remain  loaded  with  a 
weight  of  from  225  to  350  pounds  for  a  space  of  six  hours.  During  this 
time  they  ascend  and  descend  several  thousand  steps  in  pits  of  an  inclination 
of  45°.  In  ascending  the  stairs  they  throw  the  body  forward,  supported  on 
a  staff,  generally  not  more  than  three  decimetres  (about  a  foot)  in  length. 
They  walk  in  a  zigzag  direction,  because  they  have  found  from  long  experi- 
ence (as  they  affirm)  that  their  respiration  is  less  impeded  when  they  traverse 
obliquely  the  current  of  air  which  enters  the  pits  from  without." 


Of  no  less  crude  a  character  was  the  system  of  draining 
the  mines.  Instead  of  employing  proper  pumping  appa- 
ratus they  drew  up  the  water  in  bags  made  of  two  cow 
hides  sewed  together,  by  ropes  operated  by  horse  or  mule 
whimseys.  The  expense  of  all  this  was  enormous,  espe- 
cially as  the  bags,  constantly  rubbing  against  the  shafts, 
had  to  be  renewed  every  week.  Speaking  of  the  mine 
of  the  Count  de  Regla,  Humboldt  says  that  "  the  expense 
of  these  machines  which  drew  up  the  water,  not  by  means 


MODERN  COST  OF  PRODUCTION.  51 

of  pumps,  but  by  bags  suspended  on  ropes,  then  amounted 
to  more  than  750,000  francs  per  annum." 

Equally  wasteful  was  the  system  of  extracting  the  sil- 
ver from  the  ore.  More  than  half  the  mercury  was  found 
by  Humboldt  to  be  wasted  in  the  crude  process  of  amalga- 
mation employed. 

It  is  easy  to  estimate  the  difference  in  the  cost  of  pro- 
duction between  such  barbarous  working  methods  and 
those  of  the  present  time.  It  is  not  necessary  to  describe 
the  difference.  The  reader  is  sufficiently  familiarized  with 
the  progress  constantly  made  in  mining  engineering. 
Drawing  his  attention  to  the  methods  of  former  times 
will  be  sufficient  to  prepare  his  mind  for  the  great  revo- 
lution in  the  price  of  silver  caused  by  the  changed  methods 
of  production. 

The  Declining  Cost  of  Production  and  Rising  Output 

of  Silver. 

Silver  is  largely  found  in  connection  with  other  metals 
in  the  silver-bearing  ores.  The  by-product  is  of  consider- 
able value  and  with  the  present  low  cost  of  reduction, 
frequently  pays  the  expense  of  mining  and  leaves  the 
silver  a  profit  to  the  mine  owner. 

In  his  statement  to  the  Royal  Commission  appointed 
to  inquire  into  the  recent  changes  in  the  value  of  the  pre- 
cious metals,  Professor  Roberts  Austen,  chemist  to  the 
Royal  Mint,  gave  the  available  information  from  all  the 
silver-mining  countries.  He  classifies  silver  production 
by  the  nature  of  the  ores  and  the  processes  for  reducing 
the  metals. 

The  latter  are  (i)  From  refining  of  native  gold  ;  (2) 
Dcsilverization  of  lead  ;  (3)  Desilverization  of  copper  and 


52  MONEY  AND   PRICES. 

cupriferous  products  ;  and  (4)  Treatment  of  silver   ores 
proper. 

The  products  and  corresponding  cost  for  the  year  1883-4 
(the  full  data  ready  at  that  time),  were  as  follows  : 

c      .  Fine  silver  Cost  per  ounce 

Sectlon  in  ounces.  fine. 

1 508,000  os.  2\d. 

II 30,726,000  2s.  od. 

Ill 7,200,000  u.  lid. 

IV 49,920,000  is.  %d. 


88,354,000          Average  is.     %d. 

This  includes  the  highest  cost  level  of  production  under 
antiquated  methods  as  well  as  also  the  lowest  cost  under 
the  newest  developments. 

This  latter  level  was  even  then  known  as  remarkably 
low.  The  "  Bonanza  King  "  mine,  situated  near  the  high- 
est peak  of  the  Providence  Mountains,  520  feet  deep  and 
the  ore  to  be  hauled  a  distance  of  two  miles  'had  a  cost 
per  ton  of  ore  for  mining,  hauling,  and  milling  of  $25.70 
which  yielded  silver  to  the  value  of  $1/9.  This,  taking 
the  average  price  at  $i  per  ounce  is  barely  15  cents  cost 
for  the  371  grains  of  fine  silver  (25. 70  cost  in  179.  product 
=  1:7)  which  make  the  silver  dollar. 

It  is  further  stated  (from  official  reports)  that  the  value 
of  the  silver  ore  treated  in  California,  varies  from  $50  to 
$500  per  ton,  a  great  proportion  yielding  in  the  mill  over 
$100  per  ton.  "As  a  considerable  proportion  was  pro- 
duced at  a  cost  of  only  $6.50  per  ton,  it  is  not  probable 
that  the  mean  cost  of  extraction  exceeded  that  at  the 
'Bonanza  King,'  say,  $25  per  ton." 

But  it  is  not  America  alone  which  broadened  out  her 
silver  product.  The  Broken  Hills  Mines,  in  New  South 


LOW  COST  AND  INCREASING  OUTPUT.  53 

Wales,  produced  silver  at  a  cost,  including  mining  charges, 
is.  id.  (26  cents.)  per  ounce  of  fine  silver,  "  if  the  lead  be 
considered  of  no  value."  The  product  in  1886  was 
871,665  ounces  of  silver  and  1,991  tons  of  lead.  If  the 
lead  were  counted  at  $50  a  ton  only,  it  would  nearly 
have  covered  the  cost  of  production  an'd  leave  the  silver 
output  almost  a  profit.  The  10,397  tons  mined  and  re- 
duced at  a  cost  of  £4  12s.  o%d.,  or  $22.34  =  $232,200,  less 
lead  $100,000,  leaves  $132,000  as  the  cost  of  the 
871,665  ounces  of  silver,  which  is  15  cents  per  ounce. 
But  it  was  expected  that  the  cost  of  production  would 
be  considerably  reduced,  and  undoubtedly  has  been  so 
reduced  judging  from  the  developments.  The  product 
was  increased  so  rapidly  that  it  amounted  to  9,000,000 
ounces  in  1890.  In  1891  the  Australian  silver  mines 
yielded  10,900,000  fine  ounces;  in  1892  the  product  was 
14,600,000  ounces  and  in  1893,  22,300,000  ounces. 

The  predictions  advanced  when  public  attention  had  first 
been  drawn  to  the  future  of  these  mines,  have  become 
more  than  verified  by  these  astounding  yields.  Mexico,  too, 
bringsconstantly  increasing  quantities  to  the  markets  under 
the  improved  methods  put  into  operation  by  capital  and 
modern  enterprise.  In  1889  the  product  was  40,000,000 
ounces;  in  1893  it  had  grown  to  48,000,000 ounces.  The 
United  States  in  1889  produced  54,000,000  ounces  ;  in 
1892  this  had  risen  to  69,000,000  ounces,  an  increase  of 
nearly  30  per  cent,  in  four  years  and  in  1893  the  product 
was  65,000,000  ounces. 

The  annual  average  price  per  fine  ounce  according  to 
the  tables  in  the  report  of  the  Director  of  the  Mint  stands 
in  the  following  relation  to  the  world's  output  for  the  last 
ten  years : 


54 


MONEY  AtfD  PRICES. 


Value 
per  fine  ounce. 
Dollars. 

Product 
in 
fine  ounces. 

1885  

1.0645 

92,004,000 

1886  

.0046 

93,276,000 

!887  

.97823 

96,124,000 

!888  

.0^807 

108,827,000 

1889  

.93572 

I2O,2I4,OOO 

1800  . 

1.04633 

126,095,000 

1801.  . 

.98786 

137,171,000 

1892  

87102 

142,940,000 

1801.  . 

.78031 

161,776,000 

1804.  . 

.637449 

166,601,995 

The  steadily  decreasing  price  rather  stimulates  than 
deters  production  and  proves  the  correctness  of  the  scien- 
tific estimates  of  the  best  informed  authorities  of  ten  and 
fifteen  years  ago.  We  can  safely  assume  the  profitable- 
ness of  silver  mining  when  in  the  face  of  adverse  price- 
circumstances  such  results  are  produced. 

If  the  closing  of  the  mints  of  Europe,  America,  and 
India  has  not  alone  not  checked  production  but  supplies 
have  increased  in  the  ratio  shown  above,  what  would  not 
be  the  result  in  output  if  an  extra  stimulus  were  given, 
by  an  artificial  price  set  by  an  international  agreement  ? 
A  greater  decline  in  price  than  any  yet  recorded  would 
be  the  inevitable  and  not  very  remote  consequence. 

The  expectations  of  gain  were  inducements  powerful 
enough  to  make  people  go  into  so  hazardous  an  under- 
taking as  silver  mining  when  the  methods  of  production 
were  as  crude  as  we  have  seen  and  the  results  far  more 
doubtful  than  under  present  methods.  Adam  Smith  says 
that  the  profits  of  the  undertakers  of  silver  were  never 
very  great  in  Peru.  From  the  authority  of  Frezier  and 
Ulloa  he  quotes 


THE  INCENTIVE    TO  MINING.  55 

"  That  when  any  person  undertakes  to  work  a  new  mine  in  Peru,  he  is 
universally  looked  upon  as  a  man  destined  to  bankruptcy  and  ruin,  and  is 
upon  that  account  spurned  and  avoided  by  everybody.  Mining,  it  seems,  is 
considered  there  in  the  same  light  as  here,  as  a  lottery,  in  which  the  prizes 
do  not  compensate  the  blanks,  though  the  greatness  of  some  tempts  many 
adventurers  to  throw  away  their  fortunes  in  such  unprosperous  projects." 

The  tables  have  been  turned  ;  we  have  seen  how  the 
output  has  increased,  stimulated  undoubtedly  by  the  great 
profits  realized  by  the  mine  owners.  Through  causes  suf- 
ficiently explained,  silver  has  now  become  an  industrial 
product,  merchandise.  The  agencies  engaged  in  promot- 
ing mining  operations  are  of  such  a  nature  that  it  would 
be  difficult  to  speculate  upon  the  future  status  of  silver  in 
the  market.  Equally  difficult  would  it  be  to  speculate 
upon  its  future  position  as  an  industrial  object.  But  its 
career  as  a  money  metal  must  be  considered  closed,  since 
we  know  that  any  stimulus  of  demand  by  coinage  and 
international  agreement  would  even  accelerate  the  increas- 
ing flow,  which  has  marked  its  history  in  the  last  half 
dozen  years. 

The  mere  knowledge  of  the  quantities  easily  procurable 
and  waiting  to  be  called  to  light,  must  work  toward  de- 
stroying its  value  as  a  money  metal.  The  ratio  of  gold 
to  silver  depends  on  their  use  in  currency,  as  Thorold 
Rogers  observes.  The  functions  which  formerly  the  two 
metals  exercised  jointly,  can  be  easily  fulfilled  by  gold 
alone,  because  of  the  great  quantities  put  into  circulation, 
its  smaller  bulk  making  it  a  more  convenient  means  of 
payment  in  countries  with  an  expanding  and  expansive 
money  economy,  and  because  of  the  aid  which  other 
means  of  payment  supply  to  the  modern  world. 


56  MONEY  AND  PRICES. 

Credits  and  Credit  Money. 

Credits  and  credit  paper  have  even  in  former  times 
played  a  considerable  part  in  the  balancing  of  accounts. 

In  England  and  in  America  they,  with  other  modes  of 
clearings,  have  superseded  the  use  of  money  in  commerce 
almost  entirely.  It  is  not  even  a  new  mode  of  payment, 
payment  without  money.  We  find  it  as  far  back  as  the 
days  of  the  Babylonians.  It  is  said  that  the  Jews  invented 
bills  of  exchange.  They  are  credited  with  it  at  different 
places  and  at  different  times.  They  were  transmitters  of 
the  civilized  methods  of  antiquity  to  the  modern  nations 
of  Europe,  and  while  these  nations'  were  progressing 
from  barbarism  to  civilization,  the  Jews  were  the 
only  vehicles  *  through  which  international  com- 
merce and  the  complicated  money  and  banking  busi- 
ness of  the  world  could  be  conducted.  When  the 
people  had  advanced  sufficiently  to  take  up  the  larger 
transactions  of  trade,  the  Jews  were  quickly  enough 
driven  away  or  shut  up  in  ghettos.  With  everybody's 
hand  upon  them  and  upon  their  property,  they  had  to 
keep  this  in  a  movable  state  so  as  to  easily  transfer  equiv- 
alent value  to  any  place  that  might  offer  them  shelter  in 
case  of  forcible  ejection  from  the  country  of  their  birth. 
This  naturally  had  a  tendency  to  quicken  their  undoubted 
ability  in  conducting  the  larger  operations  of  international 
finance.  Having  their  co-religionists  in  every  part  of  the 
inhabited  world,  they  formed  a  sort  of  Hansa  of  their 
own,  which  needed  no  stringent  articles  of  association  to 
enforce  strict  compliance  with  their  obligations  and  no 

*  The  mediaeval  monks  at  a  somewhat  later  period  undertook  a  great 
part  of  commercial  business,  and  transfers  of  payments  were  made  through 
them. 


TRANSFERS  OF  CREDIT.  57 

law  to  give  effect  to  their  bills  drawn  upon  each  other. 
Reversely  they  could  draw  funds  from  different  parts  of 
the  world  and  it  is  quite  in  keeping  with  this,  as  it  is 
in  evidence,  that  they  became  the  bankers  of  the  world. 
It  is  easy  to  understand  why  the  Christian  nations  should 
ascribe  to  the  Jews  the  invention  of  a  system  so  mysteri- 
ous to  them  as  the  writing  of  a  sum  on  a  piece  of  paper, 
addressed  to  an  unknown  person  in  a  distant  place,  signed 
by  the  Jew  in  characters  unknown  to  the  Christian,  and 
receiving  that  sum  of  money  either  himself  or  through  a 
third  or  fourth  person,  at  any  time  thereafter. 

But  did  not  Tobias,  seven  or  eight  hundred  years  before 
Christ,  collect  a  sum  of  money  from  a  man  in  a  distant 
country  on  the  presentation  of  a  promise  to  pay?  Gabael, 
living  far  away  in  Media,  recognized  his  signature,  though 
given  some  thirty  years  before  in  Nazareth  in  the  ancient 
kingdom  of  Israel  which  had  ceased  to  exist.  The  money 
was  paid  without  hesitation.  But  it  was  not  anything 
more  than  a  common  occurrence  under  the  laws  of  the 
ancient  monarchy. 

Cicero  when  he  returned  from  his  pro-consulate  in  Cilicia, 
left  the  value  of  his  spoils  at  Tarsus  and  took  a  draft  on 
Rome  to  avoid  by  so  doing  the  danger  and  risk  of  sea 
travel.*  This  transaction  could  not  have  been  possible 
except  as  an  incident  and  part  of  an  organized  system  of 
banking. 

The  Jews  were  even  then  the  chief  conductors  of  the 
financial  operations  of  the  Roman  world.  Trading  was 
not  a  gentleman's  vocation.  It  is  looked  upon  in  all  agri- 
cultural aristocracies  with  disdain.  A  Roman  senator 
was  led  to  execution  for  the  great  offence  of  being  engaged 

*  At  least  this  is  the  interpretation  given  by  Wm.  Roscher,  Grundlagen 
der  National  Oekonomie,  of  the  passage  in  Cicero,  Epist.  ad  Pam.,  ii.,  17,  i. 


58  MONEY  AND   PRICES. 

in  a  manufacturing  trade.  Robbing  the  nations  and  spoil- 
ing the  people  were  more  in  the  line. 

The  Jews  found,  therefore,  things  well  prepared  at  an 
early  stage,  when  they  took  possession  of  a  field  which 
constantly  widened  in  the  centuries  following  the  fall  of 
the  Roman  Empire.  Their  knowledge  of  the  trading 
methods  of  ancient  civilizations  reached  back  a  thousand 
years  when  they  came  in  contact  with  the  nations  that 
were  forming  out  of  the  ruins  of  mighty  Rome. 

It  is  doubtful  whether  at  any  time  of  extensive  mercan- 
tile activity,  where  trading  with  distant  countries  was  a 
self-evident  condition,  credit  payments  and  transfers  from 
debtor  to  creditor  did  not  exist  in  one  form  or  another. 

The  burnt  clay,  the  glass,  leather,  fur,  iron,  and  copper 
money  of  ancient  nations,  issued  in  limited  quantities  un- 
doubtedly, and  stamped  by  the  government  may  have 
sufficed  for  home  trading.*  Like  the  Chinese  cash  these 
money  substitutes  answered  the  purpose  for  which  they 
were  intended.  But  the  squaring  of  foreign  accounts 
between  the  Phoenician  city  republics  or  Carthage  and 
their  colonial  dependencies  or  federated  sister-republics, 
could  not  be  undertaken  with  these  money-signs. 

The  farther  we  go  back  the  more  difficult  it  would 
seem  to  have  been  to  square  accounts  by  means  of  money 
payments.  The  precious  metals  were  not  so  abundant 
and  transportation  was  not  so  safe  in  ancient  and  even 
quasi-modern  times  as  to  warrant  the  assumption  that 
foreign  trading  was  largely  based  on  their  agency. 

It  is  therefore  reasonable  to  assume  that  methods  of 
payment  existed  not  very  dissimilar  to  our  own  credit 

*  In  early  stages  trading  is  always  in  kind.  The  savage  and  barbarian  are 
suspicious  of  being  cheated  by  anything  but  what  he  can  perceive  to  be  of 
equivalent  value  to  him. 


SETTLEMENTS  AT   THE  FAIRS.  59 

payments,  transfers,  and  promissory  notes.  For  the  later 
period  of  the  middle  ages  we  have  decided  proofs  of  the 
employment  of  such  methods. 

The  Settlements  at  Fairs. 

The  fairs  of  Europe  gave  opportunities  for  the  early 
introduction  of  a  system  of  clearings.  It  is  natural  that  the 
opportunities  offered  by  a  meeting  of  traders  from  distant 
parts  at  regular  intervals  of  time,  should  be  improved  upon. 

The  large  trade  settlements  were  made  quarterly  or 
semi-annually.  In  Germany,  within  my  own  recollection, 
bills  of  exchange,  and  open  accounts  even,  were  made 
payable  at  the  Leipsic  or  Frankfort  fairs,  held  in  the  fall 
and  in  the  spring  of  the  year.  At  some  of  the  fairs  mer- 
chants assembled  on  fixed  days  for  the  settlement  of 
accounts. 

Very  stringent  laws  governed  the  payment  of  accept- 
ances, or  of  accounts  made  payable  at  the  fairs.  This  was 
made  necessary,  undoubtedly,  by  the  difficulty  of  keeping 
the  debtor  within  the  reach  of  the  fair  authorities.  This 
is  only  a  reminiscence  of  the  system  dating  back  many  a 
century. 

At  Lyons  the  system  of  clearings  was  carried  to  such 
perfection  that  it  finds  no  equal,  even  in  our  time.  Mer- 
chants were  compelled  to  present  an  account  of  their 
debits  and  credits  in  a  sort  of  pass-book,  called  "  bilan  " — 
open  debts  as  well  as  bills  payable.  They  addressed  them- 
selves to  one  another  in  order  to  find  whom  they  were  in- 
debted to,  and  to  transfer  accounts  due  them  in  liquidation 
of  accounts  payable  by  them. 

When  they  had  completed  their  arrangements,  they  as- 
sembled on  the  sixth  day  of  the  fair,  when  all  these  set- 


60  MONEY  AND  PRICES. 

tlements  were  properly  carried  into  legal  form  under 
proper  ceremonies  and  under  the  superintendence  of  the 
"  provost  marchand,"  aided  by  six  syndics,  two  of  whom 
were  French,  two  Italian,  and  two  Swiss  or  German. 
The  amount  of  indebtedness  thus  discharged  yearly,  at  the 
four  fairs,  was  estimated  at  from  50,000,000  to  100,000,000 
of  crowns  by  English  writers  at  the  close  of  the  seven- 
teenth century.*  The  whole  amount  of  coin  required  to 
pay  the  balances,  it  is  said,  could  not  possibly  have  ex- 
ceeded a  quarter  of  a  million. 

Examples  could  be  multiplied  ad  infinitum,  were  it 
necessary  to  more  than  touch  upon  the  fact  that  many 
methods  were  in  existence  at  early  epochs  by  which  com- 
mercial transactions  on  a  large  scale  were  made  possible 
through  credits  and  credit  payments. 

When  nations  have  come  to  the  state  of  maturity  in 
which  the  civilizing  ties  of  commerce  are  knit,  they  usually 
find  methods  by  which  they  can  conduct  and  settle  their 
transactions.  Money  is  of  immense  value  in  spreading 
and  facilitating  commerce.  But  it  must  not  be  forgotten 
that  its  employment  is  a  means  and  not  an  end.  Neither 
must  it  be  overlooked  that  the  introduction  of  money  as 
a  means  of  effecting  payments  does  not  change  the  nature 
of  trade.  It  remains  an  exchange  of  commodities  all  the 
same,  whether  a  woollen  manufacturer  sells  his  woollens  to 
a  wool  merchant  in  exchange  for  his  wool,  or  whether  he 
sells  his  woollens  to  a  third  party,  who  pays  over  to  him 
the  amount  in  money,  and  he  takes  that  money  and  pays 
it  over  to  the  wool  merchant  in  payment  for  his  wool. 

The  fairs  were  well  calculated  to  bring  about  a  system 


*  Doubtlessly  a  somewhat   exaggerated  statement,   but  it  indicates  the 
magnitude  of  the  transactions  covered  by  clearings. 


VARIETY  OF  MONEYS.  6 1 

of  commercial  usages  by  which  money  payments  were 
easily  dispensed  with,  and  the  most  simple  and  effective 
methods  of  payments,  by  transfers  of  debits  and  credits, 
could  be  employed.  It  did  not  at  all  interfere  with  the 
price  of  merchandise  that  no  money  was  needed  in  trans- 
actions covering  many  millions  on  one  clearing  day. 

Indeed,  it  is  doubtful  whether  these  large  transactions 
and  clearings  could  have  been  effected  with  money. 

Money  payments,  if  they  had  been  possible  then,  con- 
sidering the  limited  quantity  of  circulating  mediums, 
would  have  been  a  most  difficult  task,  on  account  of  the 
monetary  situation.  All  the  nations  of  Europe  congre- 
gated at  the  fairs.  Each  had  different  coinage.  The  coins 
were  often  debased,  clipped,  sweated,  or  in  other  ways  de- 
prived of  part  of  their  original  metal  value  or  weight.  To 
do  the  examining  and  figuring  of  the  values  of  the  moneys 
thus  presented  for  settling  an  account  going  into  the 
thousands  would  have  consumed  many  hours  of  most 
valuable  time. 

Germany  alone,  with  its  many  dozens  of  assorted  states 
and  moneys,  not  of  the  highest  reputation  at  their  best, 
would  have  offered  insuperable  difficulties.*  We  know 

*  From  my  own  experience  I  can  speak  of  the  labor  entailed  by  a  remittance 
forty  years  ago  in  Germany.  To  send  a  money  package  of  a  few  hundred 
florins  from  Carlsruhe  or  Baden-Ba.den  (where  the  moneys  were  still  more 
varied)  to  Saxony,  for  instance,  required  the  conversion  of  florins,  and  of 
half  a  dozen  of  the  subsidiary  coins  of  the  South  German  monetary  system 
into  thalers,  the  monetary  standard  of  North  Germany.  Then  came  the 
Austrian  florin,  the  German  kleinthaler,  the  kronenthaler,  the  conventions- 
thaler,  the  Brabanter  thaler,  all  different  from  the  Prussian  thaler.  The 
franc  and  the  five-franc  piece  had  quite  a  circulation  in  that  part  of  Ger- 
many, as  well  as  the  money  of  Switzerland.  They  were  all  included  in  the 
different  statements  that  had  to  accompany  the  remittance.  But  these  were 
only  the  larger  silver  coins.  Many  five-  and  ten-florin  rolls  had  to  be  made 
up  of  three-  and  six-kreutzer  pieces — two  and  four  cents  respectively.  These 


62  MONEY  AND  PRICES. 

what  the  position  of  the  English  coins  was  toward  the 
close  of  the  seventeenth  century,  when  the  system  de- 
scribed above  was  under  its  fullest  development.  The 
character  of  the  moneys  all  through  the  six  centuries, 
from  the  revival  of  the  trading  spirit,  was  never  a  very 
high  one. 

They  were  subject  to  the  rapacity  of  all  the  thieves, 
crowned  and  uncrowned,  who  preyed  upon  commerce, 
and  who  knew  of  no  better  means  of  cancelling  obligations 
than  cutting  down  the  value  of  the  coins.  To  this  ques- 
tion I  shall  return  again.  Here  I  allude  to  it  only  on  ac- 
count of  the  necessary  mention  of  the  remedy  which  trade 
at  an  early  time  called  to  its  aid  to  save  itself  from  the 
destructive  consequences  of  the  constant  depreciations  and 
variations  of  the  coins. 

had  to  be  carefully  counted,  sorted,  and  packed.  Many  a  spurious  piece 
was  apt  to  steal  in  if  not  carefully  watched.  The  Coburger  Ernst  was  mean 
enough  to  steal  out  of  the  six-kreutzer  pieces  enough  silver  to  make  it  worth 
only  one  half  the  value  expressed  on  its  face.  The  dreibaetzner  (i2kreu- 
tzers  =  8  cents)  and  the  sechsbaetzner  (24kreutzers  =  16  cents),  in  rolls  of 
ten  and  twenty  florins,  were  not  insignificant  parts  of  these  mail  remittances. 
The  gold  coins  had  to  be  handled  in  the  same  way.  There  were  the  fred- 
eric  d'or,  the  louis-  or  napoleon  d'or,  the  ducat  of  Austria,  the  five-  and 
ten-florin  piece,  and  several  other  gold  coins,  which  went  all  in  to  the  gen- 
eral column,  and  had  to  come  out  in  the  final  summary  as  so  many  thalers, 
if  going  to  a  thaler  country,  or  as  so  many  florins  if  to  a  florin  country.  It  is 
easy  to  imagine  that  so  kaleidoscopic  a  currency  gave  quite  a  good  schooling 
to  the  commercial  aspirant  charged  with  the  duty  of  reducing  the  hetero- 
geneous elements  to  uniformity.  But  this  was  nothing  compared  to  con- 
ditions existing  before  the  establishment  of  the  North-German  and  South- 
German  coinage  unions,  which  chaotic  conditions  will  be  dwelt  upon  in 
another  place.  That,  under  such  conditions,  the  money-changer  had  a  very 
prominent  and  lucrative  position  in  the  republic  of  commerce  can  well  be 
understood.  Many  of  the  great  banking  houses  of  Frankfurt  and  other 
places  of  the  present  day  were  known  in  my  time  either  actually  or  tradition- 
ally by  that  name, 


THE  MONEY  OF  ACCOUNT.  63 

The  Money  of  Account. 

But  merchants  did  not  reckon  by  these  debased  coins, 
but  by  the  ideal  money,  i.  e.,  the  full  value  standard 
money,  the  money  of  account.  Payments  were  made  by 
computation  of  weight  into  the  money  of  account.  The 
price  quotations  of  the  past  can  be  understood  only  on 
this  well  supported  theory. 

This  reduction  of  moneys  to  a  common  money  of  ac- 
count, and  settling  of  accounts  by  transfers  was  first  prac- 
tised in  Europe  by  the  Bank  of  Venice.  Originated  in 
1 171,  it  was  soon  one  of  the  great  instruments  of  commerce 
of  the  Republic  and  of  the  trading  world.  Instead  of 
money  the  bank  used  a.  substitute  for  money,  the  bank 
credit.  Instead  of  the  varying  coins  it  had  the  constant 
money  of  account — the  zecchino  d'or.*  This  was  the 
standard  of  Venice,  just  as  in  the  succeeding  period  the 
Florentine  gold  coin  wast  he  standard  of  reckoning  in  all 
the  money  transactions  of  Europe.  The  fluctuations  in 
the  gold  coins  were  slight,f  but  none  at  all  can  occur  in 
the  uncoined  money  of  account.  It  can  easily  be  ima- 
gined what  great  advantage  the  system  of  paying  in  bank 
credits,  at  first  forced  upon  the  bank  by  circumstances, 
offered  to  the  trading  world  of  that  time. 

The  matter  is  of  such  importance  at  this  juncture  that 
I  may  be  permitted  to  give  a  brief  outline  of  the  working 

*The  zecchino,  as  well  as  the  florin,  follows  the  bezant,  which  again  is 
the  successor  of  the  aureus  of  Rome. 

f  Soetbeer,  taking  his  information  from  a  Florentine  publication  of  1765, 
gives  the  weight  of  the  gold  coin  for  250  years  as  follows :  1252,  72  grains  ; 
1296,  72  grains;  1324,  70^  grains;  1345,  ?oj  grains;  1375,  71$  grains; 
1402,  68  grains;  1422,  71$  grains;  1460,  71$  grains;  1462,  71$  grains; 
1464  to  1495,  72  grains  (72  grains  of  Florence  are  equal  to  53  grains 
English). 


64  MONEY  AND   PRICES. 

of  this  system  of  payment,  from  the  pages  of  Mr.  Stephen 
Colwell's  volume,  The  Ways  and  Means  of  Payment 
(Philadelphia,  1860): 

"  It  is  worthy  of  remark  that  this  very  efficient  mode  of  adjustment  dis- 
covered and  used  largely  at  this  early  period  in  the  history  of  commerce,  was 
not  dependent  for  its  efficacy  on  the  guarantee  of  the  republic.  The  guaran- 
tee sprang  out  of  the  mode  in  which  the  bank  originated :  this  convenient 
method  of  liquidation  sprang  from  the  use  of  this  new  substitute  for  money. 

"  The  coin  in  circulation  in  Venice  was,  in  many  respects,  a  nuisance  of 
the  most  vexatious  kind.  It  consisted  not  only  of  the  variety  which  the 
mints  of  Italy  at  all  times  afforded,  but  of  that  vastly  increased  variety  which 
had  accumulated  from  the  coinage  of  more  than  a  century.  Besides  this 
multiplicity  of  the  new  and  old  coins  of  Italy,  was  the  coinage  of  many  coun- 
tries of  the  far  East,  with  which  Venice  carried  on  a  vast  commerce.  To 
make  all  the  payments  of  the  domestic  and  foreign  trade  of  Venice  in  these 
coins,  of  different  degrees  of  purity,  and  many  of  them  much  deteriorated  by 
wear,  required  time,  patience,  and  skill,  which  but  few  merchants  could 
adequately  command.  The  facilities  offered  by  the  government,  through  the 
bank,  saved  all  this.  The  government  took  the  coins  one  time  for  all,  giv- 
ing therefor  a  corresponding  credit  in  the  bank  ;  and  allowed  the  depositoi 
or  lender  to  transfer  this  credit  claim  upon  the  republic  in  payment  of  his 
debt,  in  place  of  transferring  or  paying  over  the  coin  in  cash  payment. 
Whatever  men  can  employ  in  payment  of  debts,  they  will  be  willing  to 
receive  in  payment,  and  this  independent  of  any  legal  compulsion. 

"  Experience  soon  evinced  the  power  and  convenience  of  this  mode  of 
payment.  The  bank  credits  were  divisible  to  every  desirable  degree,  and 
they  could  be  transferred  with  a  readiness,  speed,  and  safety,  beyond  all 
comparison,  superior  to  any  mode  of  paying  in  coin.  The  same  sum  or 
credit  might  be  kept  in  such  rapid  circulation,  as  to  effect  an  amount  of  pay- 
ments, in  a  specific  time,  far  beyond  any  possible  movement  in  coin.  This 
rapidity  became  a  great  economy,  for  a  much  less  sum  of  credit  was  made  to 
effect  a  given  amount  of  payments  with  far  greater  speed  than  could  have 
been  attained  with  coin." 

The  same  writer  in  another  place  gives  the  following 
account  of  the  superior  character  of  this  ideal  money  of 
the  Republic  as  compared  with  the  circulating  mediums 
of  payment,  which  in  no  country  of  Europe  were  so  care- 


THE  BANK  OF   VENICE,  65 

fully  guarded  against  debasement  and  adulteration  as  in 
the  Republic  of  Venice. 

"  In  Venice,  where  the  money  of  account  was  undisturbed  for  upwards  of 
five  hundred  years,  and  was  the  medium  in  which  the  values  stated  in  bills  of 
exchange  and  bank  credits  were  expressed,  the  chief  payments  during  all 
that  time  were  made  in  bank  credits,  bearing  a  premium  of  twenty  per  cent, 
over  the  precious  metals.  Any  attempt  by  the  Venetian  government  to 
debase  the  coin  would  have  been  futile  and  ineffectual,  unless  the  bank  had 
been  at  the  same  time  destroyed,  and  the  money  of  account  broken  up. 
Many  changes  were  made  in  the  coins  of  Venice,  but  their  true  value,  in 
every  instance,  was  at  once  marked  by  their  value  in  the  bank  money."  * 

All  the  moneys,  mutilated  or  sound,  turned  in  by  de- 
positors were  weighed  and  assayed  and  accounted  for  at 
their  true  value,  and  not  as  the  tale  read  on  the  face. 
This  carries  the  proof,  if  one  were  needed,  that  wherever 
money  debasement  was  a  characteristic,  that  money  was 
credited  by  the  intrinsic  value  of  weight,  and  not  by  the 
extrinsic  character  of  tale.  By  this  means  everybody 
dealing  with  Venice  was  made  sure  at  all  times  that  his 
account  would  be  squared  in  the  full  value  of  the  money 
of  account.  The  Venetians  knew  that  trade  follows 
sound  money.  The  only  money  sure  to  be  always  of  full 
value  was,  in  one  sense,  not  money  at  all. 

Hamburg  adopted  the  same  policy  in  creating  the  mark 
banco.  The  accounts  were  all  made  out  and  settled  in 
this,  the  money  of  account,  which  was  not  coined.  It 
was  valued  at  about  25  per  cent,  more  than  the  mark  cur- 
rent— the  coin  in  circulation. 

The  Bank  of  Hamburg  found  it  necessary  for  self- 
preservation  to  adopt  the  expedient.  To  guard  against 
the  continuation  of  losses  arising  from  a  debased  coinage, 
the  system  of  reckoning  all  moneys,  turned  in,  by  this 

*  Article  by  Stephen  Colwell  in  Bankers'  Magazine,  July,  1857. 
5 


66  MONEY  AND  PRICES. 

newly  adopted  money  of  account  was  introduced.  All 
moneys  were  assayed,  weighed,  and  credited  by  this 
standard.  The  bank  money  thus  established  proved,  of 
course,  according  to  all  authorities,  the  least  variable  of  all 
Europe. 

In  England,  up  to  the  coinage  act  of  1816,  the  money 
of  account  was  something  different  from  the  money  in 
circulation.  The  unit  of  account  was  the  pound  sterling. 
This  was  not  coined  money,  but  it  represented  a  certain 
value  in  gold,  and  this  value  of  gold  was  put  into  the 
sovereign,  which  henceforth  stood  as  the  coin  representing 
the  pound  sterling.  It  was,  therefore,  the  full  value  of 
the  money  of  account  which  created  the  full  value  coin — 
i.  e.,  as  then  determined  :  5  pennyweights  3  171-623  grains 
of  standard  gold,  and  at  the  value  of  ,£3  ifs.  io\d.  the 
fine  ounce. 

From  the  reign  of  Charles  II.  until  the  year  1816,  when 
the  sovereign  was  coined,  the  pound  sterling  was  not 
represented  by  any  piece  in  the  coinage.  The  guinea  was 
intended  to  be  of  the  value  of  a  pound,  but,  not  having 
been  correctly  adjusted,  its  greater  value  was  at  once 
shown  by  its  greater  price  expressed  in  the  money  of 
account ;  and  the  price  of  gold  fluctuating,  it  varied  cor- 
respondingly in  price  until  the  year  1717,  when  it  was  fixed 
by  Sir  Isaac  Newton  at  twenty-one  shillings.  The  guinea 
as  a  coin  has  disappeared,  but  as  a  money  of  account  it 
still  holds  sway.  You  ask  the  price  of  a  commodity  of  a 
somewhat  large  value,  and  it  is  named  as  so  many  guineas 
and  half-guineas.  Donations,  subscriptions,  and  bets  are 
made  in  guineas,  and  not  in  pounds  or  sovereigns.  Fees 
of  doctors,  lawyers,  and  of  professional  men  in  general  are 
accounted  in  guineas,  as  well  as  the  clothing  made  by  the 
fashionable  merchant-tailor. 


FRENCH  AND   GERMAN  EXAMPLES.  67 

Though  the  "  livre  "  was  superseded  by  the  "  franc  "  in 
the  coinage  of  France  a  hundred  years  ago,  to  this  very 
day  the  word  "  livre "  is  employed  to  express  value. 
People  speak  of  so  many  "  livres  de  rente  "  in  stating  a 
man's  income.  No  one  would  say  "  cinquante  mille  francs 
de  rente." 

The  "  pistole  "  was  proscribed  in  France  under  Louis 
XIV.,  but  the  Norman  peasants  were  found  by  Mr.  d'A- 
venel  at  a  country  fair  in  1892  to  be  still  using  the  term 
"  pistole  "  and  "  demi-pistole  "  in  formulating  the  price  of 
their  cattle.  I  remember  the  "  pistole "  to  have  been 
frequently  mentioned  by  visitors  at  Baden-Baden,  but  do 
not  remember  ever  having  seen  one.  The  louis  d'or  is 
still  the  unit  mentioned  in  sportsmen's  wagers  all  over 
France. 

Prices  are  made  and  people  figure  in  moneys  which 
have  long  since  gone  out  of  existence.  The  common 
people  in  Europe  cling  to  the  names  of  coins  which  have 
not  been  seen  within  the  memory  of  the  living  genera- 
tion. 

In  Carlsruhe  I  remember  that  eggs,  butter,  and  certain 
minor  agricultural  products  were  sold  by  the  "batzen."  * 
No  batzen  existed.  It  had  disappeared  dozens  of  years 
before.  But  still  everybody  buying  or  selling  farm  pro- 
duce would  have  been  troubled,  had  he  had  to  change  his 
reckoning  suddenly  from  the  uncoined  money  of  account 
to  the  coined  money  which  was  of  entirely  different 
denominations. 

America  figured  in  pounds  and  shillings  when  no  such 
money  was  in  existence.     The  Spanish  shilling,  the  eighth 
part  of  a  dollar,  is  still  the  money  of  account  in  small  deal- 
ings in  New  York. 
*  The  batzen  was  four  kreutzers,  equal  to  2.66  cents  American  money. 


68  MONEY  AND  PRICES. 

Innumerable  examples  could  be  added  from  the  financial 
history  of  all  nations.  We  all  have  something  entirely 
different  in  our  mind  when  we  trade  or  figure  money 
values  than  the  coin  or  money  in  circulation.  We  always 
think  of  a  full  value  money  of  account,  which  the  money 
in  circulation  seldom  represents.  Our  silver  dollar  is  cer- 
tainly a  debased  coin.  The  silver  certificate  and  other 
paper  currency  are  taken  at  the  full  value  because  of  the 
implied  government  promise  that  they  will  be  redeemed 
at  the  full  value  of  our  money  of  account,  represented  by 
23.22  grains  of  fine  gold  and  called  one  dollar. 

The  idea  of  your  money  of  account  follows  you  into 
foreign  countries.  If  you  go  to  France  you  translate  the 
francs,  in  England  the  shillings  or  pounds,  in  Germany 
the  marks,  into  your  dollars,  your  medium  of  payment — 
your  own  money  of  account — before  you  get  the  value  of 
the  commodity  into  your  head. 

We  get  certain  things  and  ideas  so  firmly  fixed  in  our 
minds  that  we  do  not  inquire  into  their  genesis  and  true 
relations.  We  are  not  given  to  inquiry  into  relations  of 
things  that  grow  up  with  us  and  form  a  part  of  us.  Erro- 
neous notions  are  often  more  apt  to  take  hold  of  us  than 
true  ones,  just  because  of  our  familiarity  with  the  objects. 
Thus,  if  we  speak  of  money,  we  are  dealing  in  our  minds 
with  something  quite  different  from  what  we  see  con- 
stantly before  our  eyes.  Only  we  don't  give  the  matter 
thought.  We  think  the  thing  we  see  is  the  same  as  that 
we  do  not  see,  and  do  not  analyze. 


SECOND    PART. 


THE  HISTORY  OF  PRICES 

FROM  THE  MIDDLE  AGES  TO  THE  PRESENT 

TIME. 


CHAPTER  IV. 


The  Rising  Prices  and  Expanding  Trade  in  Germany  Preceding  the 
American  Influx  of  Silver. 


The  Wealth  of  the  Trading  Houses. 

FROM  the  middle  of  the  fifteenth  century  down  to  the 
great  upheaval  of  the  Peasant  War  in  1525,  we  hear  re- 
peated complaints  and  admonitions  of  Reichstag,  provin- 
cial diets,  town  councils,  princes,  and  popular  agitators 
against  high  living  and  lavish  expenditure  on  finery.  The 
dress  regulations  were  published  in  endless  repetition, 
without,  seemingly,  making  any  impression  on  those  for 
whose  guidance  they  were  intended.  That  they  were 
directed  mainly  against  the  working  and  the  middle 
classes  it  is  needless  to  say.  Burgher  and  peasant  enjoyed 
an  amount  of  well-being  which  was  not  to  be  seen  any 
more  from  the  days  of  the  Reformation  and  its  barbarizing 
wars  until  a  new  era  was  to  dawn  in  the  second  half  of 
the  nineteenth  century. 

With  the  destruction  of  the  aspirations  of  the  people 
centring  in  that  social  revolution,  things  soon  began  to 
change.  Germany  entered  into  that  path  of  evil  which 
led  to  the  Thirty  Years'  War,  a  war  that  made  a  dreary 
waste  of  a  country  which  for  nearly  a  century  had  vied 
with  the  Italian  city  republics  in  leading  Europe  in  civili- 
zation, developing  art,  industry,  and  commerce  to  a  degree 


/2  MONEY  AND  PRICES. 

that  gave  it  for  a  time  the  first  rank  in  Europe.  But  in 
connection  with  this  historical  fact,  it  is  important  to 
mark  that,  within  this  period  of  German  ascendancy  in 
industry  and  commerce,  prices  rose  and  living  became 
dear  to  a  formerly  unknown  degree.  The  chief  complaint 
was  directed  against  the  big  trading  houses  and  the  large 
trading  companies  which  the  former  established.  These 
concerns  were  forestallers  in  the  worst  sense.  They  bought 
up  not  alone  the  spices  of  India  and  the  silk  of  Italy,  cot- 
ton and  sugar  of  Egypt,  but,  and  this  gave  rise  to  deep 
resentment,  the  crops  before  they  were  harvested,  the 
produce  before  it  came  to  market.  An  Austrian  ordinance 
says  :  "  No  company  shall  be  permitted  hereafter  to  buy 
up  Hungarian  or  Austrian  cattle  in  droves  on  pain  of  con- 
fiscation of  the  animals  ;  all  buying  up  and  driving  away 
into  other  countries  is  prohibited."  A  company  started 
to  monopolize  the  trade  in  soap  was  by  law  enjoined  from 
going  into  operation.  It  seems  the  "  trusts  "  of  our  days 
had  their  prototypes  some  four  hundred  years  ago  in  Ger- 
many, and  met  with  the  same  popular  indignation.  The 
Jews  had  been  driven  out  of  Germany,  but  the  Gentile 
soon  found  that  his  own  flesh  and  blood  was  the  worse 
leech.  Geiler  von  Keysersberg,  one  of  the  foremost 
preachers  of  the  time,  says  that  they  were  "  greater  and 
far  worse  deceivers  and  oppressors  of  the  people  than  the 
Jews  have  ever  been ;  they  not  alone  gather  into  their 
monopolies  the  plunder  of  foreign  merchandise,  easily  dis- 
pensed with,  but  also  the  commonest  necessaries  of  life, 
as  corn,  meat,  wine,  and  the  like,  and  screw  up  prices  to 
satisfy  their  greed  and  avarice,  and  fatten  on  the  toil  of 
the  poor." 

The  Reichstag  sitting  at  Cologne  in    1512  saw  itself 
compelled  to  take  steps  against  the  usurious,  forestalling, 


THE   GREAT  CAPITAL    COMPANIES.  73 

capitalistic  companies.  A  very  stringent  anti-trust  act 
was  passed,  in  which  it  was  ordained  "  that  henceforth  it 
shall  be  prohibited  to  carry  on  such  injurious  practices, 
whereby  the  Holy  Empire  and  all  the  Estates  have  suffered 
considerable  loss  and  damage."  It  was  ordered  that  "  if 
these  merchant  companies  should  dare  to  produce  an  un- 
seemly dearth,  then  all  authorities  shall  with  diligence  and 
severity  abolish  such  dearth  and  order  honest  and  tolera- 
ble trading,  and  if  they  neglect  this  duty  then  the  imperial 
rise  shall  proceed  and  act  as  determined  in  the  law." 
"  Thou  shalt  not "  has  at  all  times  been  an  easy  expedient 
of  the  law-maker.  The  fathers,  however,  were  not  more 
successful  with  the  execution  of  the  law  than  the  children 
are  to-day. 

The  money  power  had  become  stronger  than  the  execu- 
tive power.  Many  members  of  the  town  councils  were 
members  of  the  great  stock  companies,  the  emperor's 
councillors  were  "  in  with  the  merchants  with  their  money, 
but  in  secret  only  "  ("  Doch  nur  im  Gehaim  "),  as  an  old 
Augsburger,  Lucas  Rem,  says  in  his  diary. 

Of  Ambrose  Hochstetter,  of  Augsburg,  a  contemporary 
relates,*  that  he  bought  up  whole  lines  of  goods,  and  paid 
higher  prices  than  their  market  value,  to  drive  out  other 
merchants,  who  could  not  afford  it.  "  He  then  made  a  rise 
in  the  goods  in  all  countries,  and  sold  them  just  as  he 
wished.  No  merchant  with  50,000  florins  or  100,000  florins 
could  stand  against  him,  because  he  made  profits  as  he 
chose.  He  bought  up  the  quicksilver  in  all  the  kingdoms 
and  countries  dearer  than  the  common  price,  and  paid  8 
florins  the  cwt.,"  so  that  he  could  press  the  other  merchants 
by  his  foxiness.  When  he  had  brought  all  the  quicksilver 

*  Clemens  Sender's,  an  Augsburger  citizen's  statement  quoted  by  Johan- 
nes Janssen,  Geschifhle  des  deutschen  Volkes,  vol.  j, 


74  MONEY  AND  PRICES. 

into  his  hands,  he  sold  it  again  for  14  florins  the  cwt. 
Pepper  rose  in  the  six  years  from  1512  to  15^  to  three 
and  four  times  its  former  price;  sugar,  in  1516  at  n 
florins,  stood  in  1518  at  20  florins  the  cwt. ;  almonds  rose 
from  8  florins  to  12;  nutmegs  to  seven  times  their  old 
price  within  the  same  period.* 

Now,  whatever  the  guilt  of  the  merchant  companies 
and  the  great  trading  houses  in  bringing  about  this  rise  of 
prices  by  forestalling,  whatever  help  the  speculators  and 
great  capitalists,  the  Fuggers,f  the  Welsers,  the  Hoch- 
stetters,  and  their  kind  may  have  derived  in  creating  their 
great  monopolies  from  the  altered  route  of  the  trade  of 
the  East  by  the  discovery  of  the  passage  to  India  around 
the  Cape  of  Good  Hope,  it  will  not  be  contradicted  that 
these  high  prices  could  not  have  been  obtained,  and 
certainly  not  maintained,  had  consumptive  demand  not 
become  general,  for  what  had  been  considered  luxuries  of 
the  very  rich  but  a  generation  previously.  Of  pepper 
alone  some  30,0x30  cwts.  were  imported,  annually,  an 
article  considered  so  precious  at  a  former  period  that  it 
was  used  as  money  in  trade. 

The  profits  must  have  been  enormous.  Lucas  Rem 
relates  in  his  diary  (on  Augsburg's  commercial  history,  1491 
to  1546)  that  Bartholomew  Rem  put  500  florins  into  the 
business  of  Ambrose  Hochstetter  on  profit  share.  Money 
was  put  on  deposit  with  Hochstetter  by  rich  and  poor, 
princes,  counts,  and  knights,  as  well  as  peasants,  servants, 
and  laborers.  He  held  as  much  as  a  million  florins  from 

*  See  Win.  Zimmermann,  Allgemeine  Geschichte  des  grossen  Bauernkriegs. 

\  The  memory  of  the  people  is  a  long  one.  To  the  present  day  these 
quinto-cento  private  tax-gatherers,  by  what  the  people  considered  unfair 
means,  are  pilloried  in  the  people's  language.  "  Fuggern  "  (to  Fugger)  is 
in  southern  Germany,  in  my  own  memory,  synonymous  with  cheating  or 
taking  undue  advantage  in  a  trade. 


PRECEDING    THE  NEW  SILVER  DISCOVERIES.       ?$ 

these  various  contributors  on  profit  sharing.  Now,  our 
friend  Bartholomew  Rem  wanted  an  accounting,  and  his 
share  of  the  profits  on  his  investment  of  500  florins  for  the 
six  years  from  1511  to  1517,  and  the  court  gave  him 
24,500  gold  florins  as  his  rightful  due. 

The  accumulations  of  these  merchant  princes  reached 
fabulous  sums  for  the  times,  and  would  make  quite  a 
respectable  showing  even  in  our  days  of  rapid  fortune 
making.  The  fortune  of  the  Fuggers  is  stated  by  our 
authority,  Lucas  Rem,  at  64  million  florins  in  1546,  when 
a  division  was  made  by  the  members  of  the  family. 
The  Fuggers  had  risen  from  simple  linen  weavers.  But 
in  those  days  little  was  left  of  the  old  simplicity  of  the 
master  craftsmen  in  the  patrician  merchant  adventurer. 
The  Hochstetters  especially  are  reported  as  leading  lives 
of  excessive  prodigality.  Our  informant,  Lucas  Rem, 
tells  us  that  "his  (Hochstetter's)  son  Joachim,  and  his 
son-in-law,  Franz  Baumgartner,  spent  on  one  banquet 
5000,  and  on  another  10,000  florins,  and  gambled  away 
10,000,  20,000,  and  30,000  florins  in  one  sitting."  But 
they  came  to  a  bad  end.  The  house  of  Ambrosius  Hoch- 
stetter  failed,  and  the  head  of  the  house  ended  his  days 
in  the  debtors'  prison. 

I  give  these  facts  at  greater  length,  perhaps,  than  the 
narrow  limits  of  this  essay  would  otherwise  warrant,  be- 
cause this  all  happened  long  before  any  additions  were  to 
be  made  by  the  American  silver  mines  to  the  circulating 
mediums  of  Europe.  The  mines  of  Potosi  and  of  Mexico 
were  riot  to  open  up  their  treasures  for  two  generations 
from  the  time  of  these  price  revolutions,  and  of  great 
changes  and  improvements  in  the  mode  of  living  of  the  more 
modest  classes,  of  extravagance  and  lavishncss  among  the 
patricians  and  great  merchants  of  the  free  cities  of  the  tot- 


76- 


MONEY  AND  PRICES. 


taring  Holy  Empire.  The  stories  accepted  by  most  writers 
of  the  vast  treasures  sent  to  Europe  by  the  discoverers  and 
their  followers  are  found,  on  investigation,  to  have  been 
great  exaggerations.  Roscher  says,  from  official  docu- 
ments, that  from  1522  to  1545  no  more  than  1,125,111 
piasters  in  gold  and  silver  were  shipped  by  way  of  Vera 
Cruz  to  Spain.  Soetbeer  estimates  the  whole  annual  out- 
put of  the  precious  metals  for  this  period  as  25,770,000 
marks.  L.  von  Ranke  says  that  about  the  year  1525  not 
more  than  2,000,000  franks  a  year  were  imported  into  Spain, 
and  only  after  1550  about  four  to  six  times  this  amount. 

Alexander  von  Humboldt,  who  examined  very  carefully 
the  annals  and  records  in  America  and  in  Spain,  is  cer- 
tainly the  very  best  authority  on  the  subject.  After 
analyzing  the  reports  of  different  authors  of  the  time  of 
the  conquest,  comparing  them  with  one  another  and  with 
the  official  records,  he  summarizes  as  follows  for  the 
period  prior  to  the  discovery  of  the  mines  of  Potosi : 


Period. 

Average  annual  im- 
portation of  gold 
and  silver  from 
America  into  Eu- 
rope. 

Remarks  relative  to  the  History  of  the  Mines. 

1492-1500 

Piasters. 
250,000 

Discovery  of  the  West  India  Islands  ;  Gold- 
stream  works  of  Cibas  ;  expedition  of 
Alonzo  Nino  to  the  coast  of  Paria  ;  voy- 
age of  Cabral.  The  fleets  did  not  arrive 
every  year  in  Spain,  and  that  of  Ovando 
was  considered  immensely  rich,  though  it 
was  only  laden  with  2560  marcs  of  silver 
(about  20,000  ounces). 

1500-1545 

3,000,000 

The  Mexican  Mines  of  Tasco,  Tultepeque, 
and  Pachuca  wrought  ;  Peruvian  mines 
of  Porco,  Caraugas,  Andacava,  Oruro,  Ca- 
rabaya,  and  Chaquiapu  (or  la  Paz);  spoil  at 
Tenochtitlan,  and  at  Caxamarca,  and  Cuz- 
co  ;  conquest  of  Choco  and  Antioquia. 

CAPITALISTIC  EXPLOITATION.  77 

The  piaster  was  changed  at  a  period  not  well  defined, 
and  upon  which  Alexander  von  Humboldt  was  in  doubt. 
The  new  piece  is  equal  to  our  dollar ;  while  about  one 
dollar  and  seventy  represents  the  value  of  the  old  piece. 
In  the  former  case  we  have  $250,000,  and  in  the  latter 
something  over  $400,000  for  the  period  1492-1500,  and 
$3,000,000  or  $5,000,000  for  1500  to  1545  as  the  annual 
average  of  specie  shipments  from  the  new  world  to 
Europe.  True,  the  mines  of  Germany,  under  capitalistic 
exploitation,  yielded  greater  sums  than  under  the  old 
system  of  mining  by  "  Knappschaften."  Much  complaint 
is  raised  of  the  "  Raubbau,"  the  exhaustion  of  the  lodes 
which  had  given  bread  and  sustenance  to  generations  of 
sturdy  men,  of  whom  the  father  of  Martin  Luther  is  a 
fitting  type.  The  Fuggers,  the  Hochstetters,  and  others 
are  mentioned  in  the  same  terms  as  our  own  great  mine 
operators  are  spoken  of  to-day.  Doubtless  this  added 
largely  to  the  available  money  stocks,  but  considering  the 
expansion  trade  had  taken,  the  greater  absorption  in  the 
arts  in  consequence  of  the  general  growth  of  wealth,  the 
amounts  mentioned  by  the  more  moderate  chroniclers 
would  have  been  easily  absorbed. 

The  sums  mentioned  by  most  writers  of  the  time,  and 
eagerly  fastened  upon  by  more  recent  authorities,  have, 
however,  found  considerable  diminution,  the  same  as  the 
fabled  quantities  from  the  American  discoverers,  under 
the  searching  light  turned  on  the  archives  and  govern- 
ment records  by  competent  investigators. 

The  sums  stand  frequently  discredited  by  their  impos- 
sible dimensions.  But  they  are  permitted  nevertheless 
by  modern  writers  to  form  part  of  their  argument.  So 
when  it  is  stated  that  the  mines  of  Schneeberg  in  the 
Erzgebirge  yielded  for  the  first  thirty  years  after  their 


78  MONEY  AND   PKICES. 

opening  325,000  c\vts.  of  silver.  This  is  equal  to  11,000 
cwts.  per  annum,  or  nearly  $00,000  kilos.  For  1487,  we 
are  told  in  another  place,  the  yield  for  three  months  was 
equal  to  two  tons  of  gold,  which  is  equal  to  8000  kilos 
per  annum.*  Soetbeer's  estimate  of  all  the  gold  annually 
produced  following  the  discovery  of  America,  1493  to 
1520,  is  only  5800  kilos  for  the  world  ;  and  of  all  the  sil- 
ver mines  of  the  world,  47,000  kilos  per  annum.  This  is 
only  one  tenth  the  quantity  said  to  have  been  the  yield 
of  one  silver  mine  situated  in  the  Duchy  of  Meissen,  now 
part  of  the  Kingdom  of  Saxony. 

The    Great    Quantities    of   the    Precious     Metals- 
Taken  as  Hoards  and  Money  Reserves. 

The  descriptions  of  the  display  of  jewelry  and  of  the 
quantities  of  plate  in  the  possession  of  people  of  moderate 
means  may  seem  to  be  somewhat  exaggerated.  The 
unanimity  of  writers  on  the  economic  condition  of  the 
Germany  of  that  time  does,  however,  admit  of  no  ques- 
tion of  the  great  quantities  of  the  precious  metals  absorbed 
in  plate,  vessels,  and  ornaments,  both  sacred  and  secular. 
Aeneas  Sylvio  Piccolomini  may  have  had  an  object  in 

*  The  recklessness  with  which  historians  of  repute  copy  these  exaggerations 
of  older,  uncritical  writers  may  be  seen  from  the  statement  which  is  taken 
from  Johannes  Janssen,  Geschichte  des  deulschen  Volkes,  vol.  i.,  p.  354  : 
"  Das  zu  Schneeberg  im  Erzgebirge  im  Jahre  1471  entdeckte  Silberbergwerk 
was  eines  der  reichhaltigsten  in  Deutschland.  In  den  ersten  dreissig  Jahren 
warf  es  beinahe  325,000  Centner  Silber  ab. "  Another  statement  of  his  is  : 
"  Im  Jahre  1478  betrug  eine  vierteljalhrige  Ausbeute  zwei  Tonnen  Goldes." 

Janssen  is  copied  by  other  writers,  as  he  copies  the  writers  of  the 
eighteenth  century,  and  they  a^ain  the  uncritical  writers  of  the  sixteenth. 
The  above  statements  are  fro:-.i  F.  E.  Fischer,  Geschichte  des  deutschen 
Handels,  der  Schifffahrl,  Erf.ndiingen,  Kuensle  und  Gewerbe,  Hannover, 
1785-1794. 


PLA  TE  AS  MONE  V  KESEK  VES.  ?Q 

writing  up  in  glowing  colors  the  condition  of  Germany,  so 
as  to  give  to  his  own  countrymen  the  example  of  the 
thrift,  progress,  and  general  well-being  of  the  German 
people,  still  in  the  enjoyment  of  their  independence  and 
liberty,  at  a  time  when  the  Italian  republics  of  the  Middle 
Ages  were  beginning  to  fall  a  prey  to  petty  tyrants.  But 
Froissart  is  not  less  emphatic  in  the  praise  of  the  condi- 
tions of  the  people  of  the  empire.  German  writers  of 
the  time  are  unanimous  in  pointing  to  the  wealth  of  the 
German  burghers  as  illustrated  by  their  rich  possessions 
of  gold  and  silver  plate.  Wimpheling,  one  of  the  best 
known  writers  of  the  time,  mentions  that  "the  merchants 
eat  off  dishes  of  pure  silver  and  gold,  and  I  have  myself 
dined  in  Cologne  at  such  a  table  with  eleven  other  guests." 
And  we  are  told  further  that  "  German  merchants  in 
foreign  countries  frequently  have  sent  from  home  gold 
and  silver  ware  weighing  from  thirty  to  fifty,  and  even 
one  hundred  and  fifty  pounds,  and  make  considerable 
display  with  their  plate  and  drinking  vessels,  especially 
when  strangers  are  present." 

When  we  take  into  account  this  general  authentication 
of  the  extensive  use  of  the  precious  metals  for  other  pur- 
poses than  circulation,  then  it  will  be  conceded  that  the 
increase  in  production  is  an  insufficient  explanation  of  the 
changes  in  prices  that  we  read  of. 

This  greater  absorption  in  plate  and  ornament,  it  must 
be  remembered,  marks  periods  where  wealth  loves  display, 
and  when  the  idea  of  wealth  is  associated  with  these  visi- 
ble signs  of  it.  With  the  enjoyment  of  display,  however, 
is  also  connected  the  advantage  of  having  property  in 
such  shape  that  it  is  easily  concealed  and  transformed  into 
whatever  condition  is  made  most  profitable  by  the  exi- 
gencies of  the  times.  Gold  and  silver  plate  unites  in  an 


&O  MONEY  AND  PRICES. 

admirable  manner  the  requirements  for  all  these  pur- 
poses. 

The  great  extent  of  its  possession  denotes  a  period  of 
growing  wealth,  but  is  also  significant  of  under-develop- 
ment  and,  as  in  this  instance,  of  uncertainty  as  to  the 
stability  of  the  value  of  the  coins.  Private  hoarding  in 
this  form  is  the  natural  consequence  of  such  a  state  as 
existed  in  the  Middle  Ages  and  up  to  comparatively 
recent  times.  The  period  of  law  which  subjects  the  State 
to  the  same  code  of  ethics  that  governs  the  individual 
does  away  with  it  and  finds  a  safer  repository  in  banks 
and  in  transferable  signs  of  real  or  personal  property. 
The  period  we  are  dealing  with  was  eminently  not  of  this 
nature.  The  coins  of  the  time,  of  which  we  shall  presently 
hear  more,  were  not  of  such  character  that  a  prudent 
merchant  would  care  to  lay  in  a  very  heavy  stock.  Plate, 
however,  was  sure  not  to  be  tampered  with.  It  was 
money,  or  could  be  turned  into  money  at  its  full  weight 
value  at  all  times.  In  England,  up  to  very  recently,  it 
was  given  the  government  stamp,  and  frequently  made 
use  of  in  payments.  The  custom  throughout  the  Middle 
Ages  was  to  weigh  to  the  smith  the  metal  purchased  or 
delivered  from  the  treasure-box,  and  to  pay  for  the  work 
separately.  Thorold  Rogers  in  his  researches  has  found 
this  to  have  been  the  custom  in  England.  And  the 
same  rule  prevailed  in  Germany  and  other  countries. 
Stephan  Beissel,  in  his  very  valuable  contribution,  Geld- 
werth  und  Arbeitslohn  im  Mittelalter,  gives  a  number  of 
examples  from  the  records  of  the  Chapter  of  St.  Victor  at 
Xanten. 

The  holdings  in  plate  by  people  of  wealth  were  there- 
fore, in  times  such  as  those  we  are  treating  of,  something 
of  which  the  present  has  little  conception.  Lord  Bur- 


CAUSE   OF  CttANGE   /V  PRICES.  8t 

leigh,  according  to  Hume,  left  at  his  death  between  14,- 
ooo  and  15,000  pounds  weight  in  silver  plate,  and  this  was 
worth  nearly  as  much  as  all  his  other  possessions.  For  a 
man  in  his  position  this  was  considered  very  moderate. 
According  to  Giustiniani,  Cardinal  Woolsey  possessed 
silver  plate  to  the  value  of  150,000  ducats.  Excessive  as 
these  Amounts  may  appear,  they  are  quite  within  credi- 
bility and  mark  a  general  condition  in  keeping  with  the 
theory  advanced  above.  The  treasure  stores  then,  were 
as  the  banks,  the  bonds,  and  mortgages  of  the  rich  to-day  ; 
the  trinkets  and  ornaments  were  the  savings  banks  of  the 
poor.  But  though  never  so  easily  turned  into  money  in 
times  of  need,  it  is  equally  certain  that  as  long  as  they 
were  kept  in  their  form  and  in  their  concealment,  they  were 
non-existent  as  circulation.  It  is,  therefore,  safe  to  assert 
that  what  silver  had  been  added  to  the  world's  hoards  up 
to  the  time  of  this  expansion  in  trade  and  rise  in  prices 
in  Germany,  was  only  to  a  very  limited  extent  turned 
into  money,  and  that  whatever  additional  money  was 
coined,  was  so  necessary,  and  complying  so  fully  with  an 
eager  demand  for  it,  that  it  could  have  had  no  possible 
influence  on  prices. 

The  True  Cause  of  the  Change  in  Prices  at  That 

Period. 

Now  in  treating  of  prices  we  have  here  again  to  take 
exception  to  the  rule  of  lumping  different  commodities 
and  making  a  general  price  for  them  as  indicating  the 
price  unit  of  a  period.  Even  in  the  general  awakening 
of  the  fifteenth  and  first  part  of  the  sixteenth  century  we 
do  not  find  that  all  commodities  were  affected.  The  rise 
is  chiefly  observed  in  whatever  goods  came  from  far  distant 

6 


82  MOttE  Y  AND 

countries,  principally  from  the  East.  This,  as  has  beeri 
observed,  was  largely  due  to  a  greater  demand,  but,  prin- 
cipally, to  the  altered  trade-routes  which  made  Lisbon 
for  the  time  being  the  great  emporium  for  the  Indies. 
Venice  and  Genoa  had  been  the  chief  markets  for  the 
Levantine  and  Eastern  traffic  before  the  discovery  of  the 
new  route  to  India.  They  were  easily  accessible  to  the 
German  trader.  Venice  lay  at  the  very  doors  of  the  Em- 
pire, while  the  other  Italian  cities  were  still  considered  as 
members  of  it.  Men  of  small  means  could  engage  in  di- 
rect trade  and  keep  up  an  active  competition,  and  so  keep 
prices  within  accustomed  proportions.  All  this  was 
changed  when  the  chief  port  for  the  India  trade  was 
transferred  beyond  the  Pillars  of  Hercules  and  the  pack 
horse  had  to  give  way  to  the  trading  galleon  that  plied 
between  Lisbon  and  Ghent  and  Antwerp.  The  Flemish 
and  Rhenish  towns,  but  chiefly  the  Niirnberg  and  Augs- 
burg merchants,  were  not  slow  to  take  advantage  of  these 
altered  conditions.  In  fact,  the  latter  are  entitled  to  part 
of  the  glory  of  the  discoveries.  Peuerbach  and  Regio- 
montanus  *  had  so  far  extended  and  solidified  the  mathe- 
matical and  astronomical  knowledge  of  the  time  that  the 
navigation  of  the  oceans  had  become  something  more 
than  a  matter  of  prowess  and  of  chance.  Regiomontanus 
published  a  thirty-three  years'  calendar,  the  first  of  its 
kind  published  in  Europe,  and  the  Ephemerides  were 
considered  of  priceless  value  by  navigators.  His  improved 
astrolabe  had  a  wide  distribution  in  the  East,  and  is  said 
to  have  been  bought  by  the  Venetians  for  its  weight  in 

*  Regiomontanus  was  born  in  the  year  1436  and  died  in  1476.  His  real 
name  was  Johannes  Mueller.  Born  near  Koenigsberg  in  Franconia  his 
honest  German  name  was,  in  the  manner  of  his  time,  changed  into  the 
adopted  latinization  of  his  native  place. 


FORWARD   STATE  OF  GERMAN    TOWNS.  83 

gold.  The  German  mathematicians  thus  became  the 
guides  of  the  pathfinders  to  the  new  ocean  routes. 

The  men  of  Nuremberg  and  Augsburg  took  foremost 
rank  among  the  adventurers  and  helped  intellectually* 
and  what  is  here  of  importance  to  mention,  financially,  in 
the  opening  of  the  gates  to  commerce  by  hitherto  un- 
known paths. 

Nuremberg,  an  interior  town  of  Germany,  became  the 
seat  of  manufacture  of  the  best  nautical  instruments,  com- 
passes, maps,  and  mathematical  tables.  Regiomontanus 
made  his  lasting  home  at  Nuremberg,  because,  as  he  wrote 
to  a  friend  :  "  I  find  there  readily  the  instruments  indis- 
pensable for  astronomical  observations,  and  can  with  ease 
enter  into  communication  with  the  men  of  science  of  all 
countries,  as  one  may  regard  that  city,  on  account  of  the 
travels  of  its  merchants,  as  the  central  point  of  Europe." 
Martin  Behaim,  the  traveller  and  cosmographer,  disciple 
and  friend  of  Regiomontanus,  showed  the  way  to  East 
India  on  his  globe  six  years  before  Vasco  da  Gama  made 
his  famous  voyage. 

The  prominent  position  of  the  Nurnberger  and  Augs- 
burger  is  shown  in  the  fact  that  in  1504  the  King  gave  all 
German  merchants  the  right  of  separate  jurisdiction.  The 
Welsers  obtained  the  privilege  of  sending  their  own  trad- 
ing vessels  with  the  royal  fleet  that  sailed  to  India.  Two 
of  the  three  German  ships  which  accompanied  the  squad- 
ron in  1505,  are  said  to  have  been  the  biggest  ever  fitted 
out.  These  vessels  returned  in  1506,  and  though  the 
equipment  had  cost  the  sum  of  66,000  ducats,  yet  the  en- 
terprising merchants  made  a  clear  profit  of  175  per  cent. 

So  it  will  be  seen  that  the  change  that  came  over  the 
trading  world  by  reason  of  the  discoveries,  threw  double 
treasures  into  the  lap  of  Augsburg  and  Nuremberg,  first, 


84  MONEY  AND  PRICES. 

by  giving  them  a  monopoly  of  the  East  India  trade  and 
enabling  them  to  charge  whatsoever  they  saw  fit  in  excess 
of  the  old  ruling  prices ;  and  secondly,  by  giving  them 
the  wealth  of  Ormus  and  of  Ind  at  first  cost,  without  pay- 
ing toll  to  the  middlemen  on  the  Adria  and  on  the 
Ligurian  Gulf. 

Thus  we  can  comprehend  that  the  story  of  the  great 
wealth  mentioned  above  of  the  men  whose  names  have 
become  household  words,  even  as  that  of  the  Rothschilds 
of  to-day,  was  born  of  reality.  They  were  the  men  to 
grasp  the  new  spirit.  Assisting  in  the  scientific  awaken- 
ing of  the  Renaissance  they  also  understood  to  reap  the 
golden  harvest,  which  commerce  had  in  store  for  the 
venturesome  trader. 

That  the  expansion  of  trade  in  the  fifteenth  and 
sixteenth  centuries,  and  the  great  revolutions  in  the 
commercial  and  economic  world,  which  ushered  in  a  new 
era,  should  have  been  possible  without  any  greater  addi- 
tions to  the  moneys  of  the  world  than  what  has  been 
stated  above,  from  authentic  sources,  must  put  the  cur- 
rent money  theories  to  a  very  serious  test.  That  price 
increases  could  occur  of  the  nature  described,  makes  the 
strain  more  severe  yet,  if,  indeed,  it  leaves  these  theories 
anything  to  stand  upon. 

Corroborating  Facts   from    the   Italian   City 
Republics. 

Besides  this  direct  evidence  of  a  formidable  rise  in  prices 
occurring  without  an  increase  in  money,  and  due  solely 
to  the  greater  demand  and  to  changed  conditions  of  so- 
ciety and  of  trade,  we  have  the  corroborating  evidence  in 
the  prices  ruling  in  the  Middle  Ages  in  the  trading  re- 


CORROBORA  TING  PROOF  FROAf  JTAL  Y.  8$ 

publics  of  Italy.  There  the  change  from  mediaeval  con- 
ditions of  trade  to  the  advanced  mode  of  trading  had 
taken  place  at  a  comparatively  early  period.  Instead  of 
being  hoarded,  money  was  put  in  rapid  circulation,  barter 
was  replaced  by  money  payments,  and  money  economics, 
and  the  bank  and  the  banker  took  charge  of  the  circula- 
tion, keeping  the  moneys  actively  employed.  The  Lom- 
bards and  the  Florentines  were  the  bankers  of  Europe. 
The  wealth  of  the  Medici  of  Florence,*  the  Pepoli  of 
Bologna,  whose  income  is  stated  by  Sismondi  f  as  amount- 
ing to  one  and  one  half  millions  of  francs,  and  others, 
was  analogous  to  that  of  the  Welsers  and  Fuggers  of 
the  later  period  in  Germany.  The  great  losses  which  the 
•Florentine  bankers  suffered  by  the  bankruptcy  of  Edward 
III.  are  sufficient  proof  of  their  opulence.:}:  The  houses  of 
the  Bardi  and  the  Peruzzi  had  to  go  under,  as  the  pro- 
fligate king  owed  them  i,365,ooogoldflorins;  according  to 
Cibrario,  28,000,000  francs.  The  goldflorin  of  1334-1394 
was  worth,  according  to  the  best  authorities,  ten  reichs- 
mark.  In  French  money  the  goldflorin  equals  12  francs, 
or  about  $2.40.  The  amount  quoted  by  Cibrario  vvould 
be,  therefore,  an  overstatement  and  be  equal  to  16,380,000 
francs  only.  Still  quite  a  respectable  sum  for  that  time. 

But  the  price  of  wheat  in  Italy  is  said  to  have  been 
three  times  that  ruling  in  Paris  in  the  period  of  1289  to 
1379,  while  the  general  dearth  in  the  fifteenth  century  is 
attested  by  the  complaints  of  the  foreign  ambassadors  at 

*  See  Roscoe,  History  of  Lorenzo  il  Magnifico. 

f  Sismondi,  Ilistoire  des  Rfyubliques  Italienties  du  Afoyen  Age. 

\  In  1422  Florence  had  72  banks  ;  in  1472  only  33  ;  as  Roscher  says, 
probably  in  consequence  of  the  more  oligarchic  concentration  of  wealth.  The 
Florentine  banks  were  so  widely  distributed  that  they  were  called,  "  il 
quintoclemento."  The  Medici  alone  had  16  banking  houses  indifferent 
European  cities. 


86  MONEY  AND  PKICES. 

the  Papal  court  (Raumer's  Hist.  TaschenbucJi).  It  is  the 
opinion  of  an  authority  (Pagnini)  that  in  Florence  prices 
of  commodities  measured  in  silver  rose  but  little,  and  not 
at  all  against  gold  from  the  fifteenth  to  the  eighteenth 
century. 


CHAPTER  V. 

Consideration  of  the  Varying  Factors  in  Connection  with  Prices.     The  Dis- 
tinctions Necessary  to  be  Observed. 

THE  difficulties  which  meet  us  in  making  price  com- 
parisons covering  recent  periods,  of  which  I  treated  in  the 
first  two  chapters  of  this  essay,  naturally  increase  the 
further  back  we  trace  our  inquiry.  Even  if  we  eliminate 
the  absurd  combination  of  commodities  to  make  up  a 
price  unit  for  comparison,  it  will  be  readily  understood 
by  students  of  economics  that  other  almost  insuperable 
obstacles  meet  us  at  every  step.  Unless  we  understand 
their  nature  and  are  prepared  to  give  them  thorough  ex- 
amination, we  shall  fall  short  of  a  proper  estimate  of  the 
question :  "  The  influence  of  the  money-quantities  in 
circulation  upon  prices." 

I  will  class  the  different  considerations  we  have  to 
observe  under  a  few  general  headings  and  give  a  brief 
explanatory  statement  concerning  them  : 

1.  The  economic  position  of  the  period. 

2.  The  nature  of  the  money  under  which  price  quota- 
tions are  given. 

3.  The  character  of  commodities, 

a.  Differing  as  articles  of  commerce,  or 

b.  Articles  for  home  consumption  or  immediate 

use. 

4.  The  changed  relations  of  commodities  in  progressing 
periods, 

87 


88  MONEY  AND  PRICES. 

I.  The  Economic  Positions. 

The  remoter  periods  of  the  more  advanced  states  of 
modern  Europe  had  what  is  called  in  German  "  Natural- 
wirthschaft,"  "  paying  in  kind."  Taxes,  rents,  fines,  mori- 
tariums,  etc.,  were  so  paid,  and  trading  was  done  on  the 
basis  of  valuations  according  to  a  standard  of  account.. 
At  first  this  standard  was  the  head  of  cattle  ;  later  on  the 
pound  of  silver,  with  its  divisions,  took  its  place.  But 
this  by  no  means  implies  trading  through  the  medium  of 
money,  "  Geldwirthschaft."  It  would  therefore  be  falla- 
cious to  make  comparison  with  these  early  periods  of  de- 
velopments, which,  however,  are  by  no  means  extinct,  and 
are  found  wherever  conditions  exist  akin  to  those  in  which 
Germany,  England,  and  France  found  themselves  prior 
to  the  thirteenth  century.  We  find  in  the  monastic 
records  a  multitude  of  price  notations  in  solidi  and  denarii^ 
going  as  far  back  as  the  sixth  century  and  becoming  quite 
frequent  in  the  eighth  and  ninth  centuries.  This  may 
partly  be  on  account  of  the  greater  number  of  settlements 
made  in  the  interval,  secular  and  ecclesiastic  benefices, 
etc.,  which  formed  the  great  territorial  tenures,  but  is 
undoubtedly,  to  a  very  large  extent,  due  to  progress  in 
economic  development.  The  price  records  are  of  high 
value  in  another  sense,  which  will  be  dealt  with  later  on. 
For  regular  comparative  use  they  would  not  be  more 
valid  than  prices  of  horses  or  cattle  on  the  pampas  of 
Argentina  twenty  years  ago  and  to-day.  European 
travellers  may  have  been  astonished  to  meet  beggars  on 
horseback  in  the  streets  of  Buenos-Ayres  * ;  Americans 
know  that  in  border  settlements  horseflesh  is  cheap 
enough  for  an  impecunious  man  to  own  a  horse.  The 

*  Burmeister,  Rrise  durch  die  La  Platq,  Staaffn, 


THE    TEACHERS  OF  EUROPE.  89 

means  of  a  mere  living  are  easily  obtained.     But  without 
a  horse  a  man  would  be  a  hermit  or  an  outcast. 

Trafficking  in  kind  has  been  too  long  a  marked  con- 
dition in  the  United  States,  reaching  down  even  to 
present  times,  to  need  any  extended  exposition  to 
American  readers. 

The  Beginnings  of  a  Money  Economy  in  Christian  Europe. 

The  change  in  Europe's  economic  condition  was  pre- 
pared by  a  foreign  civilization.  The  Caliphate  and  the 
Saracen  kingdoms  were,  by  unity  of  religion  and  language, 
well  fitted  to  take  up  and  spread  the  civilization  of  the 
classic  world.  The  commerce  of  the  world  as  well  as  the 
money  of  the  world  was  attracted  by  them.  When  the 
power  of  the  Caliphs  had  given  way  to  effeminacy  and 
was  finally  shattered  by  the  Mongol  invasion,  the  seeds 
sown  in  Spain  had  long  been  giving  fruit,  and  Europe 
was  beginning  to  turn  to  the  Peninsula  for  light  and 
guidance  out  of  the  darkness.  The  services  of  the  Arab 
to  mankind  in  preserving  and  extending  the  stores  of 
knowledge  in  geography,  medicine,  algebra,  and  chemis- 
try, and  introducing  the  use  of  the  mariner's  compass,  the 
pendulum,  and  the  decimal  system  of  numbers  were  in 
themselves  enough  to  make  the  centuries  following  their 
dominion  their  lasting  debtors.  Without  their  work  the 
era  of  European  progress  could  not  have  opened  as  it  did 
from  the  time  following  the  Crusades.  By  this  strange 
phenomenon  the  Christian  nations  were  brought  in  con- 
tact with  a  higher  civilization,  and  a  new  vision  was 
opened  out  before  them. 

Soon  the  Adriatic  and  Ligurian  cities  became  the  heirs 
of  the  fading  Moslem  empires,  although  up  to  the  fifteenth 


90  MONEY  AND  PRICES. 

century   Egypt  still  held  high  rank  among  the  trading 
peoples  of  the  Mediterranean. 

The  North  gradually  fell  in  line.  From  Italy  through 
the  medium  of  the  empire  up  the  Rhine  to  Flanders, 
and  over  the  Alps  along  the  Danube,  civilizing  and 
liberalizing  tendencies  became  manifest.  The  free  cities 
all  along  these  trading  routes  soon  became  the  centres  of 
trade,  poetry,  and  art,  and  the  strongholds  of  freedom. 
In  the  same  way,  only  somewhat  earlier,  the  cities  of  Pro- 
vence and  up  the  Rhone  had  benefited  from  the  Hispano- 
Arabic  teachers,  chiefly  through  the  instrumentality  of  the 
Jews.  Thus  the  great  sleep  was  broken.  Again  com- 
merce and  trade  could  pave  the  way  for  industry  and  art 
to  spread  and  create  conditions  analogous  to  those  in  which 
civilized  communities  in  all  ages  have  moved. 

2.  The  Nature  of  the  Money  under  which  Price 
Quotations  are  Noted. 

Henceforth  money  was  not  alone  a  measure  of  account, 
but  became  a  means  of  payment.  Gold  and  silver  coins 
were  first  employed  in  real  commerce,  while  home-trading 
still  adhered  to  barter.  Whatever  the  nature  of  the  deal- 
ings, however,  it  is  most  important  to  know  the  kind  of 
money  in  which  these  payments  were  effected,  or  by 
which  the  reckonings  were  made.  Without  such  knowl- 
edge the  history  of  prices  is  an  unintelligible  jumble  of 
figures. 

The  early  coins,  as  pointed  out  above,  were  the  coins 
of  imperial  Rome.  The  Merovingian  and  Carlovingian 
kings  naturally  adopted  the  coinage  and  monetary  divi- 
sions of  the  empire  whose  prefects  they  styled  themselves, 
until  Charlemagne  put  the  imperial  crown  upon  his  head. 
As  the  kings  of  the  Franks  did  not  overthrow  the  empire, 


MONEYS  AND  PRICE   QUOTATIONS.  9! 

but  did  assume  its  prerogatives  and  powers,  they  continued 
to  use  the  administrative  machinery  they  found,  having 
nothing  to  put  in  its  place.  Moneys,  weights,  and  meas- 
ures being  necessary  adjuncts  of  civilization,  had,  as  a 
matter  of  course,  to  be  borrowed  from  the  conquered. 
With  the  decline  of  the  Carlovingian  house  the  moneys 
begin  to  fall  in  value.  Charlemagne  still  held  the  coining 
of  money  as  a  prerogative  of  the  crown.  But  with  Louis 
the  Debonnair  the  practice  is  introduced  of  giving  the 
privilege  over  to  certain  bishoprics  and  towns,  Pruem  and 
Corvey  being  the  first  named  and  others  following  in 
quick  succession.*  But  at  first  the  right  of  coinage  is 
given  reluctantly  and  sparingly,  with  reservation  of  the 
royal  power  to  regulate  and  supervise.  But  even  this 
changed  with  the  extinction  of  the  dynasty.  The  separa- 
tion of  the  kingdoms  severed  the  coinage  relations  pre- 
viously existing.  In  the  Trans-Rhenan  division  the 
separate  coining,  gradually  becoming  the  privilege  of  the 
towns,  of  the  bishops,  and  of  the  rising  dynastic  houses, 
marks  an  economic  progress,  although  we  note  a  continu- 
ous diminution  in  the  value  of  the  coins.  The  increased 
demand  for  money  denotes  the  change  in  the  trade  condi- 
tions noted  above.  This  demand  could  not  possibly  have 
been  met  by  the  central  power,  even  had  its  weak  constitu- 
tion permitted  the  exercise  of  a  prerogative  which,  in  the 
low  development  of  society,  would  have  taxed  the  me- 
chanical and  administrative  skill  of  the  time  quite  beyond 
its  powers. 

The  pound  of  silver,  the  original  unit  of  value,  divided 
into  20  shillings  (solidi),  each  of  12  pence  (denarii),  in  the 

*  See  Inama-Sternegg,  Deutsche  Wirthschafls-Geschichledes  lolen  bis  izten 
Jahrhunderts.  Louis  the  German  to  Worms  and  Strassburg  ;  Arnulf  to 
Hamburg  ;  Louis  the  Child  to  Eichstaedt,  Osnabrueck,  etc.,  etc. 


92  MONEY  AND 

course  of  time  was  made  to  yield  two  and  three  times  as 
many  pieces  of  the  same  denominations. 

The  gold  solidus,  or  aureus,  of  the  Roman  Empire  was 
the  unity  of  account  in  the  German  part  of  the  Frankish 
monarchy  at  this  earlier  period.  This  solidus  contained 
3.88  grams,  which  is  about  equal  to  $2.54  of  our  money. 
The  denarius,  the  twelfth  part  of  the  solidus,  was  worth, 
therefore,  in  our  gold  value  21  cents.  Some  of  the  ex- 
tant imperial  denarii  of  that  time  show  a  gram  weight 
of  3.23,  which  is  equal  to  that  price,  if  silver  and  gold  are 
rated  as  I  to  9,  the  relation  of  the  time,  according  to  the 
recorded  transactions  and  agreements  allowing  substi- 
tution of  one  metal  for  another  or  of  purchases  at  this 
ratio. 

But  the  silver  denarius  in  this  comparison  and  part  of 
the  later  silver  money  of  account  (240  of  which  make  a  £ 
sterling,  a  pound  or  livre  of  France  and  the  Pfund  Heller 
of  Germany)  in  the  best  Carlovingian  coinage  was  1.7 
grams  of  silver,  and  was  worth  about  12  cents  gold  value 
of  our  time.* 

It  was  not  long,  however,  before  it  was  found  that  there 
was  a  source  of  gain  in  the  privilege  of  coining  money, 
and  the  spiritual  and  territorial  magnates  .of  the  empire 
did  not  hesitate  long  to  turn  it  to  advantage.  The  best 
Carlovingian  denarius  is  unalloyed — in  the  I2th  century 
8  per  cent,  of  alloy  is  found  in  the  money.  But  the  chief 
depreciation  is  in  the  reduction  in  metal  which  gradually 
reduced  the  moneys  to  a  fraction  of  their  original  weight, 

*  The  gram  =  15.12  grains,  and  at  1.7  grams  this  denarius  weighed  25.7 
grains  of  silver.  Silver  had  a  higher  value  and  counting  the  ratio  of  9  to  i 
against  16  to  i,  the  American  coinage  value,  makes  the  25.7  grains  equal  to 
45.68  grains  in  to-day's  coinage.  The  dollar  is  371.25  grains  ;  45.68  grains 
are  therefore  12.33  cents.  At  the  ratio  of  15.50  to  I  the  value  is  11.92  cents. 


RECOINAGE    VERY  FREQUENT.  93 

so  that  the  English  penny  of  to-day  is  but  an  eighth  part 
of  the  imperial  denarius. 

The  cause  of  this  reduction  is,  to  a  large  extent,  the 
eagerness  of  the  bishops  and  members  of  the  empire  to 
take  advantage  of  the  seigniorage,  the  charge  for  coinage. 
They  retained  at  first  a  certain  proportionate  number  of 
pieces  in  payment  of  mint  charges.  This  was  soon  extended 
into  the  right  of  making  the  weight  of  the  coins  lighter 
and  increasing  the  number  minted  from  a  given  weight  of 
silver.  The  advantage  derived  from  the  exercise  of  the 
mint  privilege  was  rapidly  improved  upon.  The  privilege 
was  turned  to  account  by  the  members  of  the  empire,  at 
their  accession  to  their  respective  governments.  Even  this 
arrangement  does  not  seem  to  have  sufficed,  and  frequently 
recoinage  was  undertaken  on  the  slightest  pretext.  With 
increasing  multiplication  of  the  coins,  extension  of  trading, 
and  the  doubtful  character  of  much  of  the  money  in  cir- 
culation, it  frequently  became  necessary  to  recoin  the 
foreign  pieces  and  give  them  the  territorial  stamp  to  make 
them  more  easily  recognizable.* 

*  We  must,  however,  not  fojget  that  the  debasement  of  the  coins  was  not 
entirely  in  the  nature  of  a  forced  loan  which  is  never  returned,  or  the  kind 
of  robbery  practised  by  the  Valois  Kings  and  the  English  Henry  VIII.  The 
lowering  of  the  standard  in  Germany  and  in  France,  proceeding  from  the  I2th 
and  1 3th  centuries,  was  largely  in  obedience  to  popular  demand.  So  was  the 
multiplication  of  the  coinages  and  the  exercise  of  the  minting  privilege  by 
the  bishop  towns,  the  territorial  lords,  and  the  commercial  free  towns. 

The  heavy  coins  of  the  original  standard  were  entirely  unsuitable  as  a  cir- 
culating medium.  They  could  not  possibly  have  served  in  local  trading  and 
could  only  have  been  used  in  payment  in  other  than  ordinary  daily  transac- 
tions. Their  very  nature  and  high  value  prove  the  absence  of  a  money 
economy,  and  that  payment  in  kind  was  the  well-nigh  universal  rule. 

The  smallest  coin,  the  silverpenny,  the  denarius,  often  more  than  a  day's 
wages,  was  of  too  inconveniently  high  a  value  to  be  used  in  ordinary  dealings. 
We  can  imagine  a  state  of  society  out  West  with  dollars  as  the  smallest  de- 


94  MONEY  AND   PRICES. 

Up  to  a  late  period  the  imperial  coins  were  of  higher 
value  than  those  of  the  states,  bishops,  dukes,  counts, 
princes,  lords,  and  towns  of  the  empire,  all  of  whom  had 
gradually  acquired  the  privilege  of  minting.  The  chaos 
became  as  great  in  the  coinage  as  in  the  political  condition 
of  the  Holy  Roman  Empire.  The  commercial  towns, 
however,  had  begun  to  emancipate  themselves  from  the 
domination  of  their  feudal  lords.  Some  of  them  discov- 
ered at  quite  an  early  period  the  important  economic  law 
that  trade  clings  to  and  follows  sound  money.  Chief  and 
first  among  them  were  Cologne  on  the  Rhine  and  Ratisbon 
on  the  Danube.  Cologne,  the  queen  city  of  the  Rhine, 
stuck  to  good  money,  while  even  the  episcopal  cities  of 
Metz,  Treves,  and  Mayence  reduced  the  denarius,  still 
weighing  in  the  tenth  century  about  1.45  grams,  to  0.6 
grams,  as  in  the  case  of  Metz,  and  0.7  grams  in  the  case 
of  Treves  and  Mayence,  at  the  beginning  of  the  thir- 
teenth century. 

The  money  of  Cologne,  in  consequence,  became  the 
standard  of  payment  for  centuries  for  the  traders  of  the 
Rhenish  states,  just  as  the  money  of  Florence,  the  gold- 
florin,  for  the  trade  extending  beyond  state  and  national 
borders. 

nominations  used  in  settling  of  accounts,  when  the  daily  dealings  are  not 
squared  before  a  certain  amount  has  accrued. 

But  when  the  social  organism  becomes  more  flexible,  when  the  state  of 
mediaeval  exclusion  and  territorial  independence  changes  to  a  condition  of 
commercial  mobility  and  national  and  international  communication,  money 
economy  gradually  obtains  the  ascendency,  and  a  demand  for  coins  which 
will  answer  the  daily  requirements  becomes  more  and  more  a  necessity. 

The  lowering  of  the  value  of  the  coins  in  the  Middle  Ages  is  therefore  a 
sign  of  the  revival  of  the  trading  spirit  and  of  a  step  forward  in  civilization. 

The  stability  of  the  English  coinage  up  to  a  very  late  period  is  sufficient 
proof,  if  no  other  existed  (but  of  that  there  is  abundance),  of  a  much  slower 
industrial  and  economic  development. 


TffE    VARIATIONS  IN   THE   COINS.  9$ 

With  the  progress  of  the  centuries  we  find  further  de- 
viations and  variations  in  the  coins.  We  find  the  stueber 
(stiver),  the  albus,  the  florin,  the  thaler,  the  grot,  the 
obolus,  the  scutum,  from  which  the  (feu  is  derived. 

In  the  chaos  which  characterizes  the  monetary  situation 
from  the  early  Middle  Ages  to  recent  times,  and  which 
would  make  it  impossible  to  read  the  history  of  prices  in 
Europe,  the  weight  and  fineness  of  the  coins  gives  us  a 
helping  hand.  It  is  either  by  the  coins  themselves,  found 
and  collected,  or  by  comparative  statements  of  contem- 
porary writers,  that  we  can  trace  the  value  of  moneys  to 
a  fixed  standard. 

The  mark  of  Cologne  furnishes  us  this  standard  for 
Germany  up  to  the  reform  of  the  coinage  in  1873.  As 
early  as  the  end  of  the  tenth  century  we  meet  the  mark.* 
It  weighs  8  ounces,  =  £  Ib.  of  Cologne,  equal  to  234 
grams,  or  468  grams  to  the  pound  of  16  ounces,  which 
is  but  slightly  (not  quite  4  per  cent.)  heavier  than 
the  English  pound  avoirdupois  (453.54  grams).  Gold 
was  not  coined  in  any  of  the  mints.  What  gold  coins 
were  used  were  of  foreign  mintage.  Payments  made  in 
gold  are  usually  by  weight  in  plate  or  in  bars.  Even  if 
not  required  in  local  trading,  gold  was  at  all  times  a  more 
convenient  treasure-hoard  than  the  more  cumbersome 
metal.  It  is  only  after  the  Crusades  that  the  use  of  the 
gold  coins,  first  of  Byzantine  and  Saracen  coinage,  and 
later  the  coin  of  Florence,  the  florin,  became  more  promi- 
nent in  trade.  The  first  German  gold  coins  are  said  to 

*  Inama-Sternegg,  ii.,  p.  403.  "  12  solidi  =  12  denarii  +  16  denarii  for 
coinage  =  160  denarii  is  unit  of  coining  weight  ;  the  d.  =  1.45  grs.  In 
place  of  this,  by  the  end  of  the  tenth  century  already  the  designation 
4  Koelnische  Mark  '  appears,  which  consequently  had  a  weight  of  234  grams 
and  proves  itself  the  half  of  the  old  Poundweight  of  Cologne  of  468  grams," 


96  MONEY  AND  PRICES. 

have  been  struck  by  Archbishop  Walram  of  Cologne  (1333 
to  1349).  In  1354  the  three  ecclesiastical  Electors,  May- 
ence,  Treves,  and  Cologne,  entered  into  a  coinage  agree- 
ment as  follows :  "  Auch  sollen  wir  eyner  gemeiner 
muntze  von  golde  und  von  silber  in  unsern  landen  zu 
schlahn  eindrechtig  werden  "  (also  shall  we  become  united 
in  coining  a  common  money  of  gold  and  of  silver  in  all  our 
lands).  But  the  agreement  does  not  seem  to  have  kept 
them  united  very  long. 

The  goldflorin  of  Cologne  —  the  "  florin  Rhenanus 
aureus  " — maintained  its  value,  but  the  florin  currentis 
gradually  fell  to  the  low  price  at  which  we  know  it  to-day, 
and  which  is  barely  one  sixth,  and  in  to-day's  market 
value  of  silver  not  much  over  one  tenth,  its  original  value. 

Mr.  Stephan  Beissel  gives  us  valuable  assistance  in  his 
painstaking  investigation,  Geldwerth  und  ArbeitsloJm  im 
Mittelalter,  before  mentioned.  As  the  building  of  the 
church  of  St.  Victor  at  Xanten  embraced  fully  two  cen- 
turies of  the  time  of  greatest  development  in  the  history 
of  Germany  and  of  the  world's  trade,  previous  to  the  dis- 
covery of  the  American  mines,  we  have  here  valuable 
material  for  our  purpose.  I  will  not  go  into  the  details  of 
the  variations  of  the  coins,  which  would  only  confuse  the 
reader.  But  it  is  necessary  for  an  intelligent  reading  of 
prices  to  understand  the  value  of  the  money  in  which  they 
are  expressed.  For  this  purpose  I  will  here  give  the 
reduction  of  moneys  of  certain  average  periods  as  carried 
out  by  Mr.  Beissel,  which  will  fasten  the  value  of  the 
standard  of  payment,  which  we  shall  later  on  employ  in 
the  reading  of  prices  of  the  same  average  periods. 

The  mark  of  Cologne  furnishes  the  following  number  of 
pieces  under  the  name  of  "  Mark  current  "  at  the  different 
periods  here  mentioned  in  the  coins  of  Xanten. 


VARIATIONS  itt  THE  At  ARK  CURRENT. 


97 


NUMBER  OF  PIECES  COINED  OUT  OF  ONE  MARK  FINE. 


Periods. 

One  Mark  Silver  gave  Num- 
ber of  pieces  in  Mark  Cur- 

Relation  of  Weight   of   the 
Mark    of    Xanten     to    its 

rent  at  the  named  Periods. 

Silver  Weight  in  1838. 

1372-1386 

6 

'3* 

1399-1444 

7 

III 

1454-1464 

7 

11} 

1490 

8 

10 

1551 

iSJ 

4 

I6SO 

26 

31 

1838 

80 

i 

The  mark  current  of  the  chapter  varied  but  little  in 
value  from  about  1392  to  something  near  the  end  of  the 
fifteenth  century.  From  that  time  to  the  middle  of  the 
sixteenth  century,  we  see  it  lose  over  one  half  in  value ; 
up  to  the  latter  part  of  the  seventeenth  century  about 
one  third  more,  and  by  the  first  part  of  this  century  it  was 
worth  but  one  twelfth  the  value  of  the  mark  of  1399,  and 
but  one  fourteenth  of  the  value  of  1386.  Other  German 
coins  current  in  Xanten  experienced  much  greater  de- 
basement. 

The  Rhenish  gold  florin  intended  to  govern  in  the  trade 
of  the  Rhenish  towns  and  agreed  upon  to  that  end  by  the 
three  electors,  stood,  therefore,  but  seldom  for  a  period  of 
more  than  a  few  years  in  the  same  relation  to  the  minor  » 
coins. 

With  the  mark  of  Cologne  and  the  coinage  resulting 
from  it  as  a  guide,  we  are,  however,  able  to  make  compari- 
sons with  present  coins  and  to  read  prices,  in  a  measure, 
within  the  understanding  of  to-day. 

Reduced  to  present  money  in  reichsmarks  (23.80 
cents)  the  mark  of  the  chapter  in  1400  was  worth  about  7 
marks  ;  in  1490  about  6  marks  ;  from  1490  to  1620  between 
5  and  2^  marks  ;  in  1680  about  2  and  in  1838  but  £  mark. 


g&  MOtiEY  AND  PRICES. 

In  Fiance. 

The  Pondus  Caroli  suffered  still  greater  vicissitudes. 
It  is  not  wi'thin  the  aim  of  this  treatise  to  point  out  the  dif- 
ferent changes  all  the  coins  underwent  in  name  as  well  as 
in  the  standard.  The  object  is  to  obtain  a  basis  for  price 
comparisons. 

The  Livre  Tournois  finally  superseded  the  other  coins 
and  remained  the  standard  in  name.  Down  to  the  revo- 
lution the  division  of  livre,  sou,  denier  remains  unchanged. 
The  change  in  value  will  be  appreciated,  however,  when 
we  remember  that  the  unit  of  to-day,  the  livre  of  the 
end  of  the  last  century  is  but  the  85th  part  of  the  original 
value  of  the  pound. 

The  grands  et  petits  seigneurs,  as  in  Germany  so  in 
France,  had  acquired  the  coining  privilege  and  exercised 
it  with  the  same  confusing  effect.  The  crown,  however, 
became  gradually  the  overshadowing  power,  absorbing  the 
sovereign  rights  of  the  feudal  lords,  and  finally  the  centre 
of  all  governmental  functions — the  very  reverse  of  the 
historical  development  in  the  constitution  of  Germany. 
From  the  days  of  St.  Louis  the  crown  began  to  exert 
itself  on  the  coinage.  The  process  was  affected  partly  by 
confiscation  but,  chiefly*  by  purchase  of  the  seignorial 
rights.  Under  the  third  race  of  kings  (the  house  of  Valois) 
there  were  only  the  dukes  of  Berry,  Bretagne,  Burgundy, 
Normandy,  Anjou,  Lorraine,  and  Orange,  and  a  few  of 
the  minor  lords  who  still  possessed  the  right  of  coining 
money.  The  number  was  constantly  reduced  until  none 
was  left.  It  had  been  the  policy  and  ambition  of  the 
kings  from  the  beginning  of  the  fourteenth  century  to 
have  uniformity  of  money  as  well  as  of  measure  for  the 
whole  of  France.  Beneficial  as  unity  of  coinage  was  for 
the  trade  and  development  of  the  realm,  it  did  not  pre- 
*  Cours  d'Economie  Politique,  par  M.  G.  De  Molinari,  vol.  ii. 


THE  LIVRE    TOURNOIS. 


99 


vent  the  constant  deterioration  of  the  coins  by  the  kings. 
We  have  a  unity  of  name  by  which  we  can  trace  the  value 
back  to  Charlemagne  ;  the  value  itself  varies  on  a  con- 
stantly widening  scale.  Sismondi  says  *  of  Philippe  of 
Valois,  that  the  gold  florin  of  Florence  at  the  beginning  of 
his  reign  ten  sous  parisis  was  worth  soon  thirty  sous,  the 
sou  having  been  debased  to  that  extent. 

The  Abbot  of  Bazinghem  in  the  article  "  Livre  "  of  the 
Encyclopedic  (quoted,  see  Molinari,  Cours  d' EC.  Pol.}, 
states  the  number  of  pieces  (livre  and  its  divisions)  of  the 
money  of  his  time  (1764)  which  were  required  to  make  up 
the  livre  and  its  divisions  of  the  times  of  the  different 
kings  from  Charlemagne  down  to  Louis  XV.  It  will 
show  the  reader  the  impossibility  of  basing  comparisons  of 
past  periods  on  the  nominal  prices  as  found  in  the  records  : 

TABLE   OF   THE   REDUCTIONS   WHICH   THE   LIVRE  OF 
CHARLEMAGNE  SUFFERED  DOWN  TO  THE  YEAR  1764. 


Livre. 

Sol. 

Den. 

Charlemagne  to  Louis  V.                              768  to  1113 

66 

8 

— 

Louis  VI.  and  Louis  VII.                         down  to  1158 

18 

13 

6 

Philippe  Auguste 

1222 

19 

18 

4i 

St.  Louis  and  Philippe  le  Hardi 

1226 

18 

4 

ii 

Philippe  le  Bel 

1285 

17 

19 

— 

Louis  le  Huntin  and  Philippe  le  Long 

1313 

18 

8 

10 

Charles  le  Bel 

1321 

17 

3 

7 

Philippe  of  Valois 

1344 

14 

ii 

IO 

Jean 

1364 

9 

19 

2 

Charles  V. 

1330 

9 

9 

8 

Charles  VI. 

1422 

7 

2 

3 

Charles  VI  I. 

1464 

5 

13 

9 

Louis  XI. 

1483 

4 

19 

7 

Charles  VIII. 

1497 

4 

IO 

7 

Louis  XII. 

1514 

3 

19 

8 

Fran9ois  I. 

1543 

3 

II 

2 

Henry  II.  and  Fran9ois  II. 

1559 

3 

6 

4 

Charles  IX. 

1574 

2 

18 

7 

Henri  III. 

1589 

2 

12 

ii 

Henri  IV. 

1611 

2 

8 

— 

Louis  XIII. 

1642 

I 

15 

3 

Louis  XIV. 

1715 

I 

4 

ii 

Louis  XV. 

1764 

I 

— 

*  Sismondi,  Histoire  dcs  Rfyubliqucs  llalienncs  du  Moyln  Age%  vol.  iii. 


100  MONEY  AND  PRICES. 

The  English  System. 

The  English  monetary  system  has  remained  in  its  divi- 
sions practically  the  same  throughout  the  centuries  as  we 
find  it  in  the  earliest  periods.  The  original  pound  of  sil- 
ver was  nearly  the  same  as  the  Troy  pound  divided  into 
20  shillings,  the  shilling  into  12  pence.  In  following  the 
English  price  records  we  have  the  great  advantage  of  uni- 
form denomination  of  money  and  slight  variations  of  the 
coins  up  to  a  late  period.  The  Norman  kings  as  well 
as  the  successors  of  the  different  royal  houses  were  real 
kings  and  knew  how  to  preserve  the  rights  of  sovereignty 
from  encroachments  on  the  part  of  the  great  feudal  lords. 
The  coins  remained  singularly  free  from  debasement.  Up 
toi3OO  the  pound  contained  5400  grains  (12  ozs.)  coined 
into  240  pence.  In  1 527  the  Tower  pound  was  declared  by 
proclamation  (5760  grains).  The  standard  of  fineness  was 
II  ozs.  2  dwts.  fine  and  18  dwts.  alloy  (7^-  per  cent.). 

The  standard  of  England  was  not  materially  changed 
down  to  the  time  of  Henry  VIII.  It  is  because  of  this, 
as  Thorold  Rogers  says,*  "  that  it  is  possible  to  construct 
an  intelligible  history  of  prices  in  England." 

*  John  E.  Thorold  Rogers,  The  Economic  Interpretation  of  History,  pp. 
197-198. 

"  The  debasement  of  the  currency  was  committed  only  once.  The  patriot 
king,  after  squandering  all  that  he  could  get  hold  of,  after  ruining  his  people, 
after  pledging  that  if  they  gave  him  the  monasteries  he  would  ask  Parlia- 
ment for  no  more  grants,  ordinary  or  extraordinary,  began  to  debase  the  cur- 
rency. Mr.  Froude,  the  apologist  for  this  monster,  the  type  of  the  philo- 
sophic historian,  and  at  present  the  advocate  of  the  Liberty  and  Property 
Defence  League,  has  described  the  transaction  as  of  the  nature  of  a  loan. 
How  obliged  coiners  and  smashers  must  be  to  him  for  so  courteous  a  descrip- 
tion of  their  calling  !  Most  of  us  are  accustomed  to  consider  the  coiner  of 
base  money  as  a  peculiarly  scoundrelly  criminal,  because  the  success  of  his 
calling  depends  mainly  on  his  being  able  to  cheat  the  poor.  Except  by  the 


CHANCES  tN   THE  ENGLISH  COINAGE.  lot 

When  Elizabeth  reformed  the  coinage,  the  shilling  was 
given  88.8  grains,  about  a  third  the  weight  in  the  thir- 
teenth and  fourteenth  centuries,  which  was  270  grains  fine 
(the  2Oth  part  of  5400  grains). 

The  Tower  pound  of  5760  grains  was  made  the  basis 
of  the  new  coinage.  Out  of  it  66  shillings  were  coined  of 
the  weight  mentioned.  This  ratio  has  remained  practi- 
cally in  force  to  the  present  day.  If  we  have  thirteenth 
and  fourteenth  century  prices  before  us,  it  is  an  easy 
matter  therefore  to  compute  them  to  present  weight  in 
the  coin  by  multiplying  them  by  3. 

In  her  proclamation  ordering  the  reform,  Elizabeth 
says :  "  The  loss  on  the  base  money  falls  principally  on 
pensioners,  soldiers,  and  hired  servants,  and  other  mean 
people  who  live  by  any  kind  of  wages,  and  not  by  rents 
of  land,  or  trade,  or  merchandise." 

The  Virgin  Queen  deserves  the  thanks  of  the  world  for 
having  given  so  strong  an  utterance  in  favor  of  honest 
money,  and  effecting  a  reform  of  the  currency  at  a  time 
and  under  circumstances  by  no  means  free  from  peril  to 
her.  "  But  she  could  be  courageous  and  bold  when  the 
interests  of  her  people  called  out  her  better  qualities  and 
made  her  give  the  good-by  to  shuffling  and  vacillation." 

magnitude  of  his  crime,  Henry  is  on  a  level  with  the  meanest  of  knaves. 
And  the  crime  is  heightened  by  the  fact  that  it  is  the  first  duty  of  a  ruler  to 
keep  the  currency  up  to  the  standard.  Such  men  as  Henry  the  Eighth,  and 
such  men  as  Ernest  of  Saxe  Coburg,  who  was,  I  believe,  the  last  European 
sovereign  who  issued  base  money,  and  repudiated  it,  ought  to  be  gibbeted  in 
history. 

"At  first  the  debasement  was  not  great.  The  standard  is  II. I  in  12. 
The  issue  of  1543  was  10  in  12.  In  1545  it  became  only  6  in  12.  In  1546 
it  was  4  in  12,  two  thirds  beingalloy.  In  1549  Somerset,  Ed  ward's  guardian, 
put  out  an  issue  of  6  in  12,  and  in  1551  one  of  3  in  12.  This  was  virtually 
the  last  issue  of  base  money." 


1 02  MONEY  AND  PRICES. 

3.  The  Different  Characters  of  Commodities  in  Differ- 
ent Price  Periods. 

It  is  of  great  importance  in  a  price  review  to  observe 
the  changing  relation  of  the  commodity  to  other  com- 
modities. In  primitive  countries,  such  as  the  most  ad- 
vanced countries  of  Europe  were  in  remote  periods,  and 
some  of  its  countries  are  still  to-day,  products  of  agricul- 
ture and  articles  intended  for  local  trade  are  very  low, 
while  articles  of  commerce  brought  from  a  distance  are 
very  high  in  price.  To  this  latter  class  also  belong  the 
products  of  local  workmanship  which  commands  a  high 
price,  by  virtue  partly  of  the  scarcity  of  skill  and  partly 
of  the  time  required  for  execution.  I  find  at  the  begin- 
ning of  the  twelfth  century  6  talents  paid  for  a  coat  of 
marten  skin  ;  for  a  pallium,  7  talents  ;  6  glass  windows,  9 
talents  ;  the  same  is  paid  for  a  church  bell.  The  talent  is 
1 1  mark  silver ;  the  mark  at  8  ounces  makes  the  talent 
equal  to  12$-  ounces  of  silver.  Hence  we  have  76.80 
ounces  of  silver  for  the  coat ;  89.60  ounces  for  the  pallium  ; 
115^  for  the  6  glass  windows,  and  the  same  for  the  bell. 
Silver  at  the  ratio  of  I  to  9  would  make  the  ounce  worth 
$2.32,  and  the  prices  of  these  three  articles,  expressed  in 
the  gold  value  of  to-day,  $178.19,  $207.71,  and  $277.35 
respectively.  Books  were  especially  dear,  and  we  find  a 
book,  Officium  Ambrosii,  in  1024  A.D.,  at  45  solidi,  which 
is  equal  to  36  ounces  of  silver,  and,  at  the  same  ratio  as 
above,  $83.52  present  gold  value.  These  must  be  con- 
sidered articles  of  luxury.  But  we  find  "  camsiles " 
(shirts  ?)  in  the  eleventh  and  twelfth  centuries  varying  be- 
tween 12  and  20  denarii.  In  the  good  old  coinage,  then 
still  in  use,  this  is  equal  to  a  present  value  of  $1.48  to 
$2.48.  A  linen  sheet  is  quoted  in  the  eleventh  century 


HEAVY    WEIGHT  OF  EARLY  COIN'S.  1 03 

.at  15  denarii  ($1.85).  These  are  high  prices  for  common 
articles.  In  the  lighter  denarius  even,  beginning  to  appear 
about  that  time,  and  of  about  half  the  value  of  the  original 
heavy  coin,  these  prices  are  not  lower  than  present  prices 
in  Germany  for  similar  home-made  articles. 

Poultry,  butter,  cheese,  and  farm  animals  are  compara- 
tively low  ;  but,  as  they  are  not  practically  articles  bought 
and  sold  in  money  at  that  early  period,  they  would  barely 
be  permissible  in  comparison. 

Still  their  prices  were  high,  little  as  money  was  circulat- 
ing, compared  with  prices  of  the  present  time  in  equally 
undeveloped  agricultural  countries. 

A  horse  was  worth  from  one  to  two  pounds.  Walter 
von  der  Vogelweide  complains  of  having  ahorse  killed  by 
"  the  wicked  Gerhard  Azze,"  "  worth  three  marks."  This 
is  the  mark  of  silver  of  eight  ounces,  =  half  of  the  pound. 
According  to  Inama-Sternegg's  researches,  this  pound  is 
the  "  pondus  Caroli "  of  408  grams,  and  the  mark  204 
grams  fine  silver.  The  mark  of  Cologne  of  144  deniers, 
witr^  the  denier  at  1.42  grams  (stated  in  this  connection  by 
Inama-Sternegg  as  the  weight),  gives  us  this  204  grams  of 
the  mark  mentioned  above. 

If  we  take  the  franc,  which  contains  4.5  grams  fine  silver 
as  the  basis,  then  this  mark  is  worth  in  to-day's  money 
75  francs,  and  the  horse  is  worth  225  francs,  or  $44.  This 
is  not  much  below  the  price  of  horses  in  some  of  our  agri- 
cultural States,  taking  the  prices  from  the  statement  of 
the  Department  of  Agriculture  for  the  year  1892.* 

*  The  average  price  for  horses  in  the  United  States  is  therefore  about  the 
same  as  the  price  for  a  common  horse  in  the  twelfth  century,  though  the 
breed  is  far  superior  to-day. 

The   Department  of  Agriculture  has  furnished  me  with  tables  of  the 


IO4 


MONEY  AND   PRICES. 


For  a  battle  horse  of  fine  breed,  as  high  as  ten  times  as 
much  as  that  was  paid. 

Expressed  in  corn,  a  silk  cloak  with  lining  was  valued 
at  the  time  of  Charlemagne  at  400  scheffel  rye,  unlined  at 
200  scheffel.* 

English  prices  of  cloth  in  a  much  later  period  show 
likewise  great  differences  if  measured  in  corn  value. 

In  1487  it  was  enacted  that  "  whosoever  shall  sell  by 
retail  a  broad  yard  of  finest  scarlet  cloth  above  sixteen 
shillings,  shall  forfeit  forty  shillings  for  every  yard  so  sold/' 

The  usual  price  was  evidently  above  sixteen  shillings,  as 
this  law  endeavors  to  reduce  the  price  to  that  point.  In 
the  value  of  the  present  money  this  would  certainly  be 
equal  to  double  the  amount.  Expressed  in  the  wheat 
price  of  the  time,  /.  e.,  6s.  and  Sc/.  the  quarter,  it  would 

average  prices  of  farm  animals.     From  these  I  take  the  value  of  horses  as 
follows  : 


Average  Price  for 

1875- 

1885. 

1892. 

United  States  

$68.01 

$65.01 

a.     Texas,  New  Mexico,  Utah,  and  Wyoming.  .  .  . 
6.     Missouri,  Kansas,  Nebraska,  California  

32-58 
47.80 

42.16 
67.80 

33-42 
56.91 

d.     Massachusetts,  Connecticut,  New  York,  New 

106  80 

We  notice  here  the  variations  which  result  from  progression  in  economic 
development.  Group  a.  represents  the  grazing  states  ;  group  b.,  the  grazing 
state  with  agricultural  progress  ;  group  f.,  the  progressive  agricultural  stage  ; 
and  group  (f.,  the  industrial  and  commercial  state  in  a  stage  of  highest  eco- 
nomic progress.  The  same  stages  have  been  passed  through  by  European 
countries,  though  great  intervals  of  time  separated  one  from  another. 

The  state  of  Germany  in  the  twelfth  century  was  not  materially  different 
from  that  occupied  by  class  a.,  and  for  price  comparisons  would  be  fairly  put 
half-ways  between  class  a.  and  class  b. 

*  A  measure  of  varying  contents  in  the  different  German  states,  from  one 
to  five  bushels. 


COMMODITIES  AND    WHEAT  PRICES.  1 05 

have  taken  2  quarters  and  3  bushels  of  wheat  to  buy  a 
yard  of  the  cloth.  Adam  Smith  says,  "  valuing  a  quarter 
of  wheat  at  27  sh.,  the  real  price  of  a  yard  of  fine  cloth 
must,  in  those  times,  have  been  equal  to  at  least  three 
pounds  six  shillings  and  six  pence  of  our  present  money." 
Common  cloth,  such  as  servants  wore,  was  not  to  be  sold 
at  "  above  two  shillings  the  broad  yard,"  according  to  an 
act  passed  under  Edward  IV.,  in  1463." 

"  Two  shillings  was  (then)  the  price  of  two  bushels  and  two  pecks,  which 
at  present,  at  three  shillings  and  sixpence  a  bushel,  would  be  worth  eight 
shillings  and  ninepence.  For  a  yard  of  this  cloth  the  poor  servant  must  have 
parted  with  the  power  of  purchasing  a  quantity  of  subsistence  equal  to  what 
eight  shillings  and  nine  pence  would  purchase  in  the  present  times."  * 

It  would  have  to  be  very  fine  cloth  which  could  not  be 
purchased  in  England  to-day  for  the  equivalent  of  four 
bushels  of  wheat  against  the  nineteen  bushels  of  1487.  It 
is  also  safe  to  assert  that  a  yard  of  the  cheaper  cloth  worth 
the  equivalent  of  one  bushel  in  to-day's  low  wheat  prices, 
would  be  of  superior  quality  even  to  the  cloth  for  which 
the  servant  in  1463  had  to  pay  the  price  of  two  bushels 
and  two  pecks. 

On  examination  we  find  all  articles  of  manufacture  cor- 
respondingly high  in  past  centuries. 

The  same  is  true  of  building-materials,  nails,  metal  work 
of  all  kinds,  etc.  Produce  from  southern  countries,  pep- 
per, sugar,  silk,  ginger,  currants,  rice,  etc.,  were  excessively 
dear.  The  same  holds  as  to  wool,  although  almost  the 
only  article  of  export.  Farm  produce,  like  butter,  cheese, 
eggs,  poultry,  was  cheap,  and  so  were  corn  and  farm  ani- 
mals, apparently.  Though  if  we  reduce  their  prices,  in  the 

*  Adam  Smith,  The  Wealth  of  Nations,  Book  I.,  Ch.  XI.,  Effects  of  the 
Progress  of  Improvement  upon  the  Real  Price  of  Manufactures, 


I06  MONEY  AND  PRICES. 

heavy  silver  pieces  of  the  time,  to  the  gold  value  of  to-day, 
the  difference  is  not  so  great.  In  the  case  of  animals,  con- 
sidering the  nature  of  the  breeds  and  their  smaller  size,  the 
difference  disappears.  Meat  was  very  cheap.  But  this 
is  the  case  in  all  undeveloped  agricultural  communities. 
It  is  a  sign  of  a  low  agricultural  development  that  meat  is 
cheaper  than  corn.  This  changes  with  progressive  agri- 
culture and  improved  relations  and  communication  with 
the  outside  world.  In  many  parts  of  the  Highlands  of 
Scotland  in  the  middle  of  the  I7th  century,  a  pound  of 
bread,  even  of  oatmeal,  was  worth  as  much  as  a  pound  of 
the  best  meat.  The  Union  with  England,  by  opening  the 
markets  for  the  Highland  cattle,  had  raised  the  price  by  the 
time  of  Adam  Smith  to  three  times  the  former  value.  He 
says  in  vol.  L,  chapter  XL,  that  "  in  almost  every  part  of 
Great  Britain  a  pound  of  the  best  butcher's  meat  is,  in  the 
present  times,  generally  worth  more  than  two  pounds  of 
the  best  white  bread  ;  and  in  plentiful  years  it  is  some- 
times worth  three  or  four  pounds."  In  1887  when  flour 
had  not  yet  fallen  to  the  extraordinarily  low  price  ruling 
at  present,  the  best  quality  of  butcher's  meat  was  worth 
fully  8^/.,  and  of  the  best  wheaten  bread  i%d.  to  i^d.t  and 
second  quality  as  low  as  id.  a  pound.* 

The  prices  paid  at  Greenwich  Hospital,  quoting  from 
Prof.  Leone  Levi's  Wages  and  Earnings  of  the  Working 
Classes,  compare  as  follows,  per  pound  : 

Meat.         Bread. 
d.  d. 


For  1  740.  .  . 

. 

j7 

I7CQ.  . 

ol 

I  A* 

i  770.  .  , 

_v 

1860  

.7* 

i  f 

T 

*  See  my  reports  to  the  Department  of  State,  U.  S.  A.,  in  Consular  Re- 
ports as  to  cost  of  living  of  the  working  classes  and  cost  of  labor  in  different 
manufacturing  industries,  1886  to  1888  inclusive, 


ANIMALS  IX  GRASSING  COUNTRIES. 


TO/ 


I  leave  out  purposely  the  intervening  decennial  years  as 
being  either  years  of  war  or  dearth.  The  quoted  years  of 
the  1 8th  century  were  distinguished  by  very  low  corn 
prices,  and  the  year  1860  was  a  year  of  peace  and  prosper- 
ity and  of  free  trade  in  corn.  The  price  relations  of  bread 
and  meat  similar  in  the  quotations  from  the  i8th  century, 
and  showing  about  2  to  I,  show  for  1860  a  difference  of 
nearly  6  to  I,  thus  bearing  out  fully  the  above  statements. 

Roscher  says  that  "  it  belongs  to  the  safest  proofs  of  the 
high  grade  of  economic  development  of  Upper  Italy 
towards  the  close  of  the  Middle  Ages,  that  the  prices  of 
cattle  compared  with  corn  prices  in  the  thirteenth  and 
fourteenth  centuries  show  but  little  variation  from  those 
of  to-day." 

In  grazing  countries,  far  away  from  markets,  the  meat 
is  of  no  value  whatever.*  The  wool,  the  fell,  possibly  the 
tallow  in  a  somewhat  more  advanced  economic  period,  of 
larger  cattle  the  hide,  are  the  only  merchantable  parts,  and 
enter  into  the  price  region  of  commodities.  Maccann, 
Two  Thousand  Miles'  Rides  through  the  Argentine  Provinces, 
1853,  relates  that  he  bought  in  the  interior  of  Buenos 
Ay  res  8000  sheep  for  i8</.  per  dozen,  and  after  a  march  of 
200  miles  to  the  market  sold  the  fells  at  6od.  per  dozen. 
The  value  of  the  100  millions  of  sheep  of  Australia  and 

*  The  following  statement  of  the  number  of  animals  and  the  number 
of  inhabitants  of  the  South  American,  African,  and  Australasian  countries 
for  1893  will  show  that  the  meat  supply  exceeds  any  possible  demand  for 
home  consumption. 


Countries. 

Horned  Cattle. 

Sheep. 

Inhabitants. 

Cape  

31*000 

'      ' 

IOS  MONEY  AND   PRICES. 

the  80  millions  of  Argentina  lies  almost  wholly  in  the 
wool  and  fell,  scarcely  at  all  in  the  meat. 

But  in  the  Ireland  of  1673,  mainly  a  grazing  country, 
the  hide  and  tallow  brought  as  much  in  the  market  town 
as  the  ox  in  the  remoter  village. 

In  Russia  but  a  few  decades  ago,  tallow  was  the  chief 
article  of  export,  and  ten  times  as  high  in  price  as  wheat, 
while  meat  was  scarcely  dearer  than  that  cereal,  weight  for 
weight.  Pallas  relates  that  the  Cossacks  of  the  steppes 
hunt  their  goats  solely  for  the  horns  and  the  hide.  With 
the  improved  conditions,  roads  and  railroads,  and  a  more 
progressive  economy,  this  has  changed.  The  world 
always  presents  the  same  phenomena  in  similar  stages. 
Boeckh,  The  Economy  of  the  Athenians,  considers  it  a 
proof  of  a  high  degree  of  civilization  that  in  the  looth 
Olympiad  an  ox-hide  was  worth  3  drachmas,  while  the 
whole  animal  was  worth  77  drachmas. 

We  can  trace  the  same  signs  in  the  United  States.  The 
annual  reports  of  the  Bureau  of  Agriculture  show  varia- 
tions of  the  average  prices  of  farm  animals  extreme 
enough  to  prove  clearly  that  the  same  conditions  exist  in 
our  remoter  states  and  territories  as  those  mentioned 
above  as  characteristic  of  primitive  civilizations. .  In 
Texas  sheep  are  worth  $1.21  ;  in  New  Mexico,  90  cents; 
Arizona,  $1.20;  Oregon,  $1.16;  Montana,  $1.51.  These 
they  breed  for  the  wool,  with  the  fell  as  an  additional 
profit.  The  more  densely  settled  states,  with  meat  and 
other  salable  products,  show  prices  from  $1.65  to  $3.43. 
Milch  cows,  in  Utah  quoted  at  $9.77,  are  returned  for 
Massachusetts  at  $32.50.  Hogs  are  $3.80  in  Nevada,  and 
$11.58  in  Connecticut.  Horses,  $16.18  in  Utah,  and 
$81.21  in  Rhode  Island.  Oxen,  $6.77  in  Mississippi,  are 
quoted  at  $28.56  in  Connecticut.  But  taking  the  highest 


MEDIEVAL   PRICES  OF    WOOL.  1OQ 

prices  for  farm  animals,  as  in  the  seaboard  states,  they  are 
yet  considerably  lower  than  the  prices  ruling  in  England. 
Such  are  the  price  differences  caused  by  the  presence  or 
absence  of  markets. 

4.    The  Changed  Character  of  Commodities  in  Pro- 
gressing Periods. 

In  examining  prices  of  different  periods  we  have  also  to 
take  into  account  the  changes  in  the  character  of  the 
commodities.  If  we  notice  the  low  price  quotations  of 
the  Middle  Ages,  we  are  inclined  to  ascribe  them  to  the 
scarcity  of  money,  and  nothing  has  given  rise  to  the 
theory  here  under  investigation,  so  much  as  these  low 
prices.  From  what  has  been  said  we  know  that  the 
standard  weight  of  coins  was  originally  very  much  higher 
than  what  it  became  subsequently  through  the  frequent 
adulterations.  We  have  shown  that  prices  by  no  means 
moved  uniformly  from  a  low  to  a  high  numerical  point. 
We  shall  show  now  that,  measured  by  present  value  in 
gold,  the  price  of  a  time  when,  on  account  of  the  scarcity 
of  money,  money  transactions  could  barely  have  been 
general,  were  higher  than  in  the  present  era  with  all  its 
vast  amount  of  moneys  in  circulation.  Before  entering 
into  this  comparison,  I  must  mention,  however,  that  one 
great  item  of  difference  is  overlooked  if  we  do  not  bear  in 
mind  that  commodities  have  changed  very  materially  from 
the  Middle  Ages  to  the  present  day.  If  we  compare 
cattle,  sheep,  hogs,  horses,  and,  in  fact,  all  animals,  we  find 
quite  a  different  breed  in  all  of  them.  A  wool-fell  of  to- 
day has  6  to  7  Ibs.  of  wool.  Hardly  two  centuries  ago  i£ 
Ibs.  was  all  it  yielded.  It  is  not  necessary  to  go  very  far 
back  to  meet  these  wretched  breeds  which  would  not  now 
be  given  shelter  except  in  the  most  backward  countries. 


HO  MONEY  AND  PRICES. 

In  England  the  weight  of  an  ox,  about  1547,  was  in  the 
neighborhood  of  400  Ibs.  ;*  under  James  I.  it  was  600  Ibs. ; 
by  the  end  of  last  century  it  had  risen  to  800  Ibs.  ;  and 
now  it  is  1 200  to  1500  Ibs.  Sheep  weighed  about  45  Ibs. 
in  the  sixteenth  century ;  by  the  end  of  the  eighteenth, 
85  Ibs.f  The  weight  of  the  meat  alone  was  : 

Oxen.  Calves.  Sheep. 

1710$ 370  50  28 

1845  | 800  140  80 

The  older  German  writers  take  the  weight  of  a  cow  as 
400  Ibs.,  while  Koppe  (1818)  speaks  of  500  to  550  Ibs.; 
Pabst  (1829)  600  to  800  Ibs.;  and  present  writers  give 
1000  Ibs.  as  the  normal  weight. 

Nor  was  the  quality  equal  to  the  present.  "  Wool, 
judging  from  the  existing  specimens  of  cloth,  was  coarse, 
and  the  fibre  was  full  of  hair."  § 

Woollen  cloth  made  in  England  as  well  as  the  wool  had 
become  an  extensive  article  of  export.  But  the  cloth  was 
of  a  loosely  twisted  yarn,  which  required  shrinking  and 
shearing  before  it  was  fit  for  wear.  Hence  it  became  cus- 
tomary to  line  cloaks  and  outer  garments  with  fur  or 
other  soft  material.  Thorold  Rogers  says :  "  A  man  in 
an  English  winter  might  as  well  have  dressed  himself  with 
a  hurdle  as  with  English  cloth."  The  finer  cloths  were 
all  imported,  chiefly  from  Flanders.  When  war  broke 
out  between  Philip  II.  and  the  Low  Countries,  "and  es- 

*  "  I  have  opened  an  account  from  the  Public  Record  Office  of  the  weight 
of  40  oxen  purchased  for  the  Navy  in  1547.  The  average  weight  of  the 
oxen  is  less  than  400." — J.  E.  Thorold  Rogers,  History  of  Agriculture  and 
Prices. 

\  Sir  Frederic  Eden,  The  State  of  the  Poor. 

\  Davenant,  quoted  by  Roscher. 

|  Tooke  and  Newmarch. 

§  J.  E.  Thorold  Rogers,  Hist,  of  Agr.  and  Prices, 


WOOLLEM  MANUFACTURE.  lit 

pecially  when  the  struggle  became  desperate,  numerous 
weavers  from  Flanders  crossed  over  to  England,  and 
brought  with  them  the  art  of  manufacturing  finer  fabrics, 
in  which  England  had  been  imperfectly  skilled,  especially 
such  woollen  stuffs  as  were  formed  from  a  tightly  twisted 
yarn."  J.  E.  Thorold  Rogers,  Hist,  of  Agr.  and  Prices.  * 

The  manufacture  of  finer  stuffs  took  its  rise  from  that 
time,  f 

The  distinctions  here  mentioned  have  to  be  borne  in 
mind  when  we  examine  prices.  In  farming  implements, 
plows,  and  tools  of  all  kinds  they  are  especially  note- 
worthy. 

*  I  have  no  doubt  whatever  that  tightly  twisted  yarns,  made  of  combed 
wool,  had  their  origin  in  Flanders.  Flanders  was  the  seat  of  a  very  early 
wool  industry.  This  is  made  evident  by  the  fact  that  we  find  in  the  list  of 
articles  cited  by  contemporary  writers  as  tribute  received  in  Rome,  woollen 
cloths  from  Belgium  (and  linen  from  Germany).  An  active  export  trade 
was  done  at  that  remote  time  in  these.  But  English  cloths  formed  articles 
of  commerce  at  quite  an  early  period,  too,  as  we  find  Cologne  doing  con- 
siderable trading  in  them  in  the  thirteenth  and  fourteenth  centuries.  I  find 
also  in  the  same  period  "  worsted"  mentioned,  as  imported  from  England, 
in  German  records.  See  also  on  this  subject  Gustav  Schmoller,  Die  Strass- 
burger  Tucker-  und  Weberzunft. 

f  England  has  always  been  very  fortunate  from  the  time  of  the  Norman 
conquest  in  deriving  benefit  from  the  folly  of  her  neighbors.  There  was 
never  a  lack  of  wars,  persecutions,  and  proscriptions  to  send  weavers  and 
other  skilled  artisans  to  her  hospitable  shores,  to  refine  the  rather  coarse- 
grained manufacturing  skill.  I  have  searched  in  vain  for  an  alien  labor 
law,  making  it  a  crime  to  bring  skilled  workers,  hired  abroad  under  con- 
tract, into  the  realm. 


CHAPTER  VI. 

Price-Comparisons. — English  Prices  from  the  Year  1261  to  the  Year  1580. 
The  Changes  in  the  Standard  of  the  Coinage  as  Affecting  the  Nominal 
Prices. 

HAVING  in  the  preceding  chapters  paved  the  way  for 
an  understanding  of  prices  in  connection  with  the  develop- 
ment and  conditions  of  economic  periods,  we  may  now 
review  prices  in  connection  with  money.  We  have  noted 
the  different  standards  and  values  of  money.  Subject  to 
constant  changes,  they  have  to  be  reduced  to  a  common 
basis  for  each  period  we  have  to  deal  with,  to  be  at  all  in- 
telligible. We  shall  first  examine  prices  in  England  from 
the  middle  of  the  thirteenth  century  to  the  time  of  Eliza- 
beth's reform  of  the  coinage,  and  thence  to  the  present 
day,  and  then  adduce  some  facts  from  French  and  German 
price  records  in  corroboration.  We  shall  then  see  whether 
the  quantities  of  money  metals  put  into  circulation  since 
the  latter  part  of  the  sixteenth  century  have  had  any 
effect  on  prices  of  commodities. 

With  England's  price  history  we  have  easy  work. 
Thorold  Rogers'  great  work  not  alone  gives  us  a  unique 
price  record  of  five  centuries,  covering  the  same  localities 
and  records  gathered  from  the  same  establishments,  but 
also  his  own  interpretation  of  the  price  and  coinage  his- 
tory of  England. 

I  begin  by  quoting  a  few  statements  from  Thorold 
Rogers'  work,  The  Economic  Interpretation  of  History. 


DEGRADATION  OF   THE  ENGLISH  CURRENCY.      11$ 

Parts  of  this  have  been  brought  to  the  notice  of  the 
reader  in  a  preceding  chapter.  But  they  will  bear  repeat- 
ing here  for  the  clearer  understanding  of  the  coinage  rela- 
tion to  the  price  records. 

"  The  original  standard  of  weight  in  the  silver  penny  may  be  taken  at  3. 
In  1299  Edward  I.  reduced  it  to  2.871  ;  in  1344  Edward  III.  reduced  it  to 
2.622,  in  1346  to  2.583,  and  in  1353  to  2.325.  In  1412  Henry  IV.  lessened 
it  to  1.937  ;  and  in  1464  Edward  IV.  to  1.55.  In  1527  Henry  VIII.  brought 
it  down  to  1.378,  and  in  1534  to  1.163.  In  1560,  after  the  restoration  of 
the  currency  by  Elizabeth,  it  is  at  1.033,  ar"d  in  1601  she  brought  it  to 
exactly  one  third  of  the  weight  it  stood  303  years  before." 

There  is  one  very  important  point  to  be  noted  :  the 
singular  uniformity  which  rules  for  nearly  the  whole 
epoch  of  three  hundred  years  in  most  of  the  price  nota- 
tions. Thorold  Rogers  is  certain  that  the  English  people 
would  not  have  submitted  to  the  changes  in  the  currency, 
slight  in  comparison  to  continental  practice,  if  payments 
had  not  been  made  by  weight  but  by  tale.  Rogers 
says  * : 

"  I  felt  convinced  then  that  the  view  commonly  taken  of  these  suc- 
cessive degradations  of  the  currency  was  an  erroneous  one,  and  could 
not  possibly  be  accepted.  To  be  true,  they  who  manipulated  the  mint  must 
have  been  preternaturally  wise,  or  preternaturally  foolish,  and  although  the 
English  race  is  not  naturally  quick  or  inventive,  it  is  not  incapable  of  dis- 
covering and  avenging  a  grievance.  Now  the  conclusion  which  I  arrived  at, 
and  that  many  years  ago,  was  that  payments  were  made  by  weight,  and  not 
as  now  by  tale,  that  whatever  was  the  weight  of  the  pieces  issued  by  the 
Mint,  a  man  who  covenanted  to  receive  or  pay  a  pound  of  silver,  for  goods, 
services,  or  dues,  receivLd  5400  grains  up  to  1527,  and  5760  afterwards, 
and  that  this  system  lasted  from  the  earliest  records  down  to  the  restoration 
of  the  currency  under  Elizabeth.  On  no  other  hypothesis  could  the  facts  be 
interpreted,  and  the  question  before  me  was,  How  could  the  hypothesis  be 
verified?" 

*  The  Economic  Interpretation  of  History ',  p.  194. 
8 


114  MONEY  AND  PRICKS. 

On  account  of  the  important  bearing  of  the  fact  on  the 
price  history  at  this  juncture,  I  will  state  the  proofs  ad- 
vanced by  Thorold  Rogers. 

"  I.  The  history  of  general  prices  entirely  agrees  with  this  hypothesis. 
They  are  nearly  unchanged  for  280  years,  if  the  whole  space  be  taken, 
though  they  are  affected  for  a  time  by  such  events  as  the  great  plague  of 
1348  and  1361,  when  the  value  of  an  article  is  mainly  due  to  the  labor  ex- 
pended on  it.  Now,  wheat  for  the  first  140  years  is  5.5-.  lo^d.  a  quarter, 
i.  f.,  from  1261  to  1400,  and  5^.  n^d.  for  the  next  140  years,  from  1401  to 
1540.  On  the  other  hand,  certain  prices,  notably  those  of  foreign  produce 
and  foreign  goods,  decline  rather  than  increase,  especially  towards  the  con- 
clusion of  the  fifteenth  century.  Now  it  is  certain  that  there  is  no  traceable 
economy  in  the  cost  of  production,  and  no  discoverable  reduction  in  the  cost 
of  freight.  And  again,  English  wool  is  rather  lowered  than  heightened  in 
price,  though  there  is  no  evidence  whatever  that  any  foreign  country  com- 
peted against  English  wool,  or,  indeed,  could  have  competed  against  it. 

"  2.  The  price  of  silver  plate.  This  is  very  extensively  purchased.  The 
purchase  of  plate,  in  point  of  fact,  was  a  very  common  kind  of  hoarding. 
The  cost  of  shaping  it  was  low,  and  the  article  was  readily  pledged  or  sold. 
The  purchase  money  is  constantly  expressed  in  pounds,  ounces,  and  penny- 
weights, the  raw  silver  or  finished  goods  being  plainly  weighed  in  the  scale 
against  coins  of  all  sorts  and  sizes.  Now  when  the  coins  in  1462  had  been 
reduced,  according  to  the  tale  theory,  to  a  little  over  half  what  they  stood  at 
in  the  earlier  ages,  Oriel  College,  in  1493,  bought  33^  ounces  of  silver  plate, 
some  of  which  was  gilt,  at  zs.  g%d.  an  ounce,  a  price  entirely  impos- 
sible by  a  tale  payment,  for  the  pence  and  farthing  represent  the  cost  of 
workmanship  and  gilding  I  might  multiply  evidence  of  this  kind,  for  I  have 
it  in  abundance,  and  it  all  points  to  the  conclusion  which  I  have  arrived  at. 

"3.  In  1462  gold  was  bought  at  30^.  the  ounce,  the  ratio  according  to 
Ruding  between  the  two  metals  being  at  11.2  to  I  at  the  time.  Such  a  price 
is  intelligible  if  the  estimate  is  taken  by  weight,  quite  inconsistent  with  the 
facts  if  it  is  taken  by  tale. 

"  4.  We  are  expressly  told  that  the  principal  loss  of  the  base  which  was 
put  into  circulation  between  1543  and  1553  inclusive,  and  remained  in  circu- 
lation for  nearly  twenty  years,  fell  on  those  who  lived  by  wages.  The  mer- 
chant could  weigh  it  and  test  it,  indeed  could  not  carry  on  his  business 
unless  he  did,*  and  perhaps  gain  an  advantage  by  his  knowledge.  But  as 

*  It  was  the  practice  among  merchants  in  Germany  to  keep  money  scales 
and  touch  stones  up  to  a  recent  period.  This  is  within  my  own  recollection. 


PAYMENT  MADE    BY    WEIGHT.  11$ 

the  issues  were  of  very  various  degrees  of  baseness,  the  man  who  received 
his  wages,  even  by  weight,  would  find  that  one  piece  went  further  than 
another,  owing  to  its  being  less  alloyed,  and  another  was  almost  a  dead  loss. 

"  5.  The  record  of  the  restoration  by  Elizabeth  is  conclusive.  The 
amount  of  base  money  which  Henry  and  his  son's  guardians  put  into  circula- 
tion was  631,950  Ibs.  in  weight.  The  currency  value  was  ^638.115,*  the 
difference  being  no  doubt  seigniorage,  or  a  charge  for  coining,  to  defray  mint 
expenses.  The  amount  of  silver  in  it  was  244,416  Ibs.,  indicating  a  de- 
basement of  near  60  per  cent.  But  out  of  this  silver  Elizabeth  coined  by 
tale  .£733,248.  She  said  she  lost  by  the  process,  though  there  seems  a  bal- 
ance to  her  advantage  of  .£95,133.  Whether  she  spoke  the  literal  truth  is  a 
question  which  some  persons  who  have  studied  Elizabeth's  utterances  might 
very  confidently  answer.  But  she  had  to  refine  the  wretched  stuff,  and  the 
separation  of  copper  from  silver  was  in  that  day  by  no  means  an  easy  busi- 
ness, and  we  know  that  the  adulteration  was  copper,  from  stories  of  the  time. 
Then  there  was  the  charge  of  coining  and  the  seigniorage,  It  is  said  that 
the  slag  was  intractable,  and  was  employed  to  mend  the  roads. 

"  6.  There  is  no  reason  to  believe  that  the  Spanish  occupation  of  Mexico 
and  the  discovery  of  Potosi  were  followed  by  any  notable  influx  of  silver  into 
England.  It  is  only  by  the  foreign  exchanges,  i.  e,  by  trade,  that  these  ex- 
changes can  operate,  and  in  the  sixteenth  century  English  trade  was  exceed- 
ingly curtailed.  Now  the  rise  in  the  price  of  commodities  between  the  date 
at  which  the  new  currency  was  reformed,  and  the  period  at  which  the  new 
silver  unquestionably  began  to  modify  English  prices,  is  exactly,  or  almost 
exactly,  the  difference  between  the  old  Tower  pound  with  the  old  prices  by 
weight,  and  the  new  prices  2.75  to  I." 

I  have  given  in  full  the  statement  of  facts,  by  which 
Thorold  Rogers  supports  the  theory  of  weight,  because 
of  the  importance  of  a  clear  understanding  of  this  point. 
Without  the  authoritative  settlement  and  ready  accept- 
ance of  the  fact,  that  mediaeval  transactions  were  made 
by  weight  and  not  by  tale,  the  price  history  of  the  past  is 
unintelligible.f 

*  Even  for  the  England  of  that  time  a  small  amount  of  circulation.  But 
the  poor  coins  drive  away  the  good  coins.  They  are  either  exported  or 
melted  in. 

f  I  will  show  by  an  example  the  impossibility  of  any  other  assumption  than 
that  payments  were  by  weight. 


MONEY  AND   PRICES. 


The  uniformity  of  prices  in  England  from  1261  to  1540 
alone  is  proof  of  this  fact.  This  would  not  tally  with  the 
gradual  reduction  of  the  silver  value  in  the  coins  from 
Edward  III.  down  to  Henry  VIII.  had  payments  by  tale 
been  the  rule. 

The  uniformity  of  average  prices  here  mentioned  was, 
of  course,  interspersed  with  years  of  dearth  and  famine. 
The  populations  were  decimated  quite  as  frequently  by 
famine  as  by  the  plague.  Adam  Smith  states  that  "  Fleet- 
wood  gives  us  two  prices  of  the  quarter  of  wheat.  The 
one  is  .£4.16  of  the  money  of  those  times,  equal  to 
.£14.8  of  that  of  the  present  ;  the  other  is  .£6.8,  equal  to 
£19.4  of  our  present  money."  It  does  not  follow  that 
such  extravagant  prices  were  the  rule  for  all  parts  of  the 
kingdom.  In  undeveloped  countries,  the  abundance  in 
one  county  cannot  be  made  available  to  allay  the  scarcity 
even  in  neighboring  counties. 

The  average  price  of  one  bushel  of  wheat,  one  bushel  of  barley,  and  one 
bushel  of  oats  for  the  decade  1291  to  1300  amounted  to  12s.  ii'fad. 

The  average  for  the  same  three  bushels  in  1351  to  1360  was  14^.  3$d., 
and  in  the  decade  1541  to  1550  the  three  bushels  stood  2Os.  lo^d. 

Now  the  actual  silver  value  of  these  three  price  quotations  would  have 
been  if  paid  by  tale  as  follows  : 


Period. 

Price  Quotation. 

Relative  Value 
of  Coin. 

Equivalent  Price 
in  Silver. 

1291-1300 
I35I-I300 
I54I-I550 

I2s.  \1%d. 
\ys.    3Hd. 
2os.  ioyid. 

3- 
2.50 
I. 

I2S.   ll^d. 

IU.  lO^d. 
6s.  11%  d. 

Higher  by  50  per  cent,  over  prices  of  the  thirteenth  and  fourteenth  cen- 
turies, by  weight  of  silver,  prices  of  the  middle  of  the  sixteenth  century 
would  have  been  but  one  half  those  of  two  hundred  years  before,  had  they 
been  taken  by  tale,  which,  of  course,  as  everybody  knows,  is  opposed  by  all 
the  facts  of  history. 


DISTANCE  ADDS    TO   PRICES.  \\"J 

We  have  the  sad  picture  displayed  before  our  own  eyes 
in  the  famines  of  Russia,  devastating  whole  provinces  of 
the  interior,  while  the  surplus  of  other  provinces  cannot 
be  brought  to  their  relief,  but  goes  by  adjacent  water 
routes  to  keep  in  plenty  the  teeming  populations  of  Eng- 
land. Granting  roads  in  good  condition,  as  in  the  Eng- 
land of  those  days,  in  the  opinion  of  Thorold  Rogers,  the 
frequent  feuds  of  the  nobles  among  themselves  or  their 
revolts  against  the  kings  would  make  it  difficult  to  effec- 
tually assist  in  bringing  relief.  Prices  are  very  variable 
within  one  and  the  same  year,  and  between  place  and 
place.  This  is  the  case  in  England  well  up  to  modern 
times. 

From  1690  to  1700,  the  price  of  coal  per  chaldron  is 
quoted  for  Bedford  at  21.?.  ;  Brecon,  IOS.  ;  Brentford,  $is. 
6d.  ;  Cambridge,  23.?.  4^.  ;  Falmouth,  2Os.  ;  Guildford, 
32^. ;  London,  24^.  ;  Monmouth,  30^. ;  Newcastle,  IDS.  6d. ; 
Norwich,  22s. ;  Nottingham,  los.  ;  Pembroke,  \6s.  ;  Read- 
ing, 32^. ;  Southampton,  43^. ;  Oxford,  40^.  * 

Nearness  to  or  distance  from  the  mine  made  a  greater 
difference  to  the  consumer  than  it  does  in  our  days.  Land- 
carriage  of  wheat  over  a  hundred  miles  would  have  easily 
doubled  the  price.  But  taking  out  the  several  years  of 
extraordinarily  high  prices  and  averaging  the  years  of  ex- 
treme cheapness  with  those  of  a  generally  higher  level, 
we  find  this  uniformity  of  price  covering  the  long  period  of 
English  history  up  to  the  period  of  the  debasement  of  the 
currency  by  Henry  VIII.  to  be  an  indisputable  fact.  This 
was  the  case  not  alone  in  wheat  and  other  cereals,  but 
in  live  stock,  farm  produce,  metals,  and  manufactures  as 
well  as  in  southern  and  eastern  produce. 

*  Thorold  Rogers,  History  of  Agriculture  and  Prices  in  England,  vol.  vi. 


Il8  MONEY  AND  PRICES. 

There  were  two  periods  of  a  marked  rise  in  the  prices 
of  all  commodities.  The  first  occurs  after  the  great 
plague.  It  ushered  in  a  social  revolution.  Death  cut  a 
wide  swath.  It  made  hands  scarce  and  lands  cheap. 
Land  could  be  had  for  the  asking  and  the  tilling.  The 
cloak  of  feudalism  was  lifted,  and  soon  torn  into  shreds. 
The  labor  acts  of  Edward  III.  did  not  lower  wages,  and 
the  broken  word  of  Richard  did  not  help  the  nobles  to 
bring  back  the  era  of  serfdom.  The  latter  had  outlived 
its  usefulness.  The  social  revolution  was  brought  about 
by  the  economic  revolutions  that  preceded  it.  Changes 
in  economic  conditions  prepare  and  make  the  world's  his- 
tory. As  in  the  cases  of  John  Ball,  Wat  Tyler,  and 
Jack  Cade,  it  is  necessary,  frequently,  to  remind  tarry- 
ing insistence  on  mouldy  parchments  that  each  generation 
must  carve  out  its  fortunes  from  the  rock  of  time,  with 
the  tools  its  intellectual  status  has  created  for  its  hands. 

The  rise  in  wages  was  general,  the  rise  in  prices  only 
in  articles  of  commerce,  while  farm  produce  was  little 
affected.  A  consequent  greater  well-being  of  the  working 
classes  up  to  the  time  of  Elizabeth  was  the  result  of  it. 

This  change  in  prices  shows  clearly  that  the  cause  lies 
entirely  outside  of  the  domain  of  money  influences  and 
fully  proves  again  the  positions  heretofore  explained  in 
these  pages. 

To  make  the  reader  grasp  at  a  glance  the  price  situa- 
tion, I  will  give  in  a  collective  statement  the  prices  of  the 
chief  commodities,  as  gathered  in  the  great  work  of 
Thorold  Rogers,  for  the  period  beginning  with  1261  down 
to  1582.  I  shall  follow  his  division  of  the  long  space  of 
time  into  four  sections,*.^.,  i.  1261  to  1350;  2.  1351  to 
1400;  3.  1401  to  1540;  and  4.  1541  to  1582,  the  last 
period,  the  time  of  the  great  debasement  of  the  currency, 


PRICES  OF  CEREALS.  I  19 

and  of  Elizabeth's  change  of  the  coinage,  which  finally  put 
the  stamp  of  time  on  the  change  of  I  to  3. 

Not  to  bewilder  the  reader  with  too  great  an  array  of 
figures,  I  shall  confine  myself  to  a  statement  of  the  aver- 
ages for  the  periods  named.  The  decennial  averages  of 
Thorold  Rogers's  price  records  vary  but  little  from  the 
general  average  for  an  entire  period  quoted.  Where  the 
price  average  is  stated  for  the  time  from  1261  to  1400, 
without  separation  into  the  first  and  second  division,  the 
price  averages  in  the  decades  of  the  period  show  no  varia- 
tion sufficiently  marked  for  distinction.  I  shall  put  a 
separate  column  against  each  price  quotation,  with  three 
as  a  multiplier  to  bring  the  nominal  price  up  to  the  present 
money  price,  *  in  conformity  with  the  facts  of  the  money 
history  of  the  time. 

I.— PRICES  OF  GRAINS,  PER  QUARTER,  IN  THE  DIFFERENT 

PERIODS   NAMED,    AND   THEIR   EQUIVALENTS   IN 

MONEY   OF   TO-DAY. 


1261  to  1351. 

1351  to  1400. 

1401  to  1540. 

1551  to  1580. 

Price 
of  the 
Period. 

In 
Present 
Money. 

Price 
of  the 
Period. 

In 
Present 

Money. 

Price 
of  the 
Period. 

In 
Present 
Money. 

Price 
of  the 
Period. 

Wheat  

t.   d. 

s.   d. 

s.  d. 

s.   d. 

s.  d. 

J.  d. 

s.   d. 

5.9* 
4-1* 
2.4 
4-H 
4.8f 
4.2 

3-9* 

I7-3* 
I2.3f 

7.0 

I3.6f 
14-2* 
12.6 

II.  3f 

6.1* 
4.1 

2.6f 

4.2 

5-oJ 

4-6 
3-8* 

I8.3J 
12.3 

7.8* 

12.6 

I5.ii 
13.6 

1  1.  Of 

c  ijl 

I7.II* 
II.    2^ 
6.  6| 

13.11* 

12.  3 

ii.  3f 
u.  6 

15-  o 

Q.iof 
5.IOJ 

II-    5 
11.  II 

10.  o 

Barley      .... 

•j    8£ 

Oats  

2.    2- 

4-  7i- 
4-   I 
3-  9* 
3.10 

Rve  .  . 

Malt  

Beans  

Peas  

*The  actual  difference  would  be  as  4^  to  I  instead  of  3  to  I  as  the  ratio 
of  silver  to  gold  was  10  to  11  to  I,  in  the  first  two  centuries  of  this  com' 
parison,  against  15 J  to  I  of  the  present  coining  ratio. 


120  MONEY  AND  PRICES. 

The  first  column  in  the  last  period  (1551  to  1580) shows 
a  rise  in  price  over  the  average  which  ruled  steadily 
for  a  period  of  280  years  almost  equal  to  the  changed 
money  relations.  The  changed  relations  of  the  shilling  of 
Edward  I.  and  the  shilling  of  Henry  VIII.  and  of  Eliza- 
beth alone  are  expressed  in  the  price  difference  ;  the  price 
in  weight  of  silver  has  not  changed. 

In  the  debasement  of  the  coins  by  Henry  VIII.  the 
adulterations  had  been  practised  for  quite  a  while  before 
price  changes  in  domestic  produce  became  very  marked. 
Traders  always  know  how  to  prevent  loss  and  to  protect 
themselves  by  taking  the  poor  coins  only  for  their  value 
in  silver. 

On  the  whole  the  change  in  the  coinage  did  not  show 
its  full  effect  on  prices  until  several  decades  after  Eliza- 
beth's act. 

The  people  become  used  in  a  sense  to  price  relations, 
and  when  the  coinage  is  limited  in  quantity,  debased  coin 
will  for  a  long  time  pass  for  much  above  its  real  value  in 
a  country  whose  commerce  and  industries  are  restricted, 
and  which  has  but  little  communication  with  the  outer 
world. 

The  trading  revolution  of  the  century  barely  touched 
England.  The  ocean  still  imprisoned  the  island  kingdom, 
and  it  was  some  time  yet  before  it  became  England's  high- 
road to  power  and  wealth.  What  little  of  foreign  com- 
merce there  was  had  been  in  the  hands  of  the  Flemings 
and  the  Hansa  up  to  quite  a  late  period.  Though  Henry 
VII.  and  Henry  VIII.  were  active  promoters  of  England's 
commercial  and  maritime  independence,  yet  the  great  up- 
rising under  Elizabeth  was  required  to  give  inspiration 
and  direction  to  the  activity  of  the  country.  The  inner 


CHARACTER   OF  LIVE   STOCK  IN  ENGLAND.       121 

economy  responded  to  these  conditions  in  pretty  nearly 
the  same  manner.  Hence  we  shall  observe  the  price 
relations  here  noted  to  continue  for  quite  a  time 
before  the  change  is  apparent  in  the  prices  collected  by 
Thorold  Rogers,  and  which  cover  the  chief  articles  of 
commerce. 

In  live  stock  the  prices  have  gone  up  to  the  point 
marked  by  the  new  money  conditions.  In  weight  of  silver 
they  are  not  changed  from  what  they  were  three  hundred 
years  earlier.  I  have  stated  the  prices  of  oxen  and  of 
sheep  separately.  For  these  animals  the  weight  is  re- 
corded in  the  later  quotations.  For  other  animals  the 
weight  is  not  given.  The  weight  recorded,  we  can  follow 
the  price  changes  in  their  true  relations  to  the  present 
period,  and  make  quite  important  deductions.  This  is  im- 
possible where  the  weight  is  not  given.  It  is,  however, 
evident  that  if  the  mediaeval  sheep  and  ox  weighed  only 
one  third  as  much  as  a  sheep  and  ox  weigh  at  present, 
cows,  pigs,  and  boars  were  of  equally  poor  breed  and 
equally  diminutive  as  compared  to  the  present  stately 
English  herds.  And  from  what  we  know  of  the  improve- 
ment of  breeds  in  subsequent  periods,  we  must  conclude 
that  the  horse  stood,  in  this  respect,  on  no  higher  level 
than  his  companions  of  the  farmyard.* 


*  In  proof  of  this,  take  the  following  statement  of  Hume,  being  part  of 
his  remarks  on  the  state  of  agriculture  at  the  time  of  James  I.  :  "  Sir  Ed- 
ward Harwood,  in  a  memorial  composed  at  the  beginning  of  the  subsequent 
reign,  says  that  England  was  so  unprovided  with  horses  fit  for  war,  that  two 
thousand  men  could  not  possibly  be  mounted  throughout  the  whole  king- 
dom. At  present  the  breed  of  horses  is  so  much  improved,  that  almost  all 
those  which  are  employed,  either  in  the  plough,  wagon,  or  coach,  would  be 
fit  for  that  purpose." — Hume,  History  of  England ',  vol.  iv.,  appendix  iii. 


122 


MONEY  AND  PXICES. 


II. PRICES  OF    OXEN   AND    SHEEP   IN    MONEY  OF    THE 

PERIODS  NAMED,  AND  THEIR  EQUIVALENTS  IN 
MONEY  OF  TO-DAY,  AND  CORRESPONDING  VALUE  IN 
WEIGHT  OF  ANIMALS  OF  PRESENT  TIME. 

(Oxen  counted  in  ist  and  2d  period  as  400  Ibs. ,  3d  period  500  Ibs.,  and  at 
present  time  as  1200  Ibs.  Sheep  at  40  to  50  Ibs.,  1st  to  2d  period,  and  150 
Ibs.  to-day.) 


1ST  AND  2D  PERIODS. 

30  PERIOD. 

4TH  PERIOD. 

1850. 

1261   TO    1400 

1401  TO  1540. 

1551    TO   1580. 

*°T3 

g-2 

•r  o 

fift 

c    . 

ssr 

i* 

fa 

13 

? 

°"2 
§1 
££ 

In  Present 

Money. 

In  To-day's 
Weight. 

^"8 
8| 

££ 

In  Present 
Money. 

In  To-day's 
Weight. 

j.    d. 

J.    d. 

j.     d. 

j.    d. 

s.    d. 

J.    d. 

s.    d. 

s.    d. 

s.    d. 

Oxen  .  . 
Sheep... 

13-1? 

1.5 

39-  4i 

4-3 

n8.9i 
12.9 

20.7 
2.2f 

61.9 
6.8} 

148.0 
20.  Of 

70.  7i 

6.4 

168.5 
I9.O 

300.0 
40.0 

III. PRICES  OF  OTHER  LIVE  STOCK  IN  MONEY  OF  THE 

PERIOD  AND  ITS  EQUIVALENT  PRICE  EXPRESSED 
IN   PRESENT   MONEY. 


1261  T< 

)    1350. 

1351    T 

>  1400. 

140!   T 

J   1540. 

1551   TC 

)  1582. 

"""o" 

|l 

In  Present 
Money. 

"o-a 

v.° 

_o  C 

In  Present 
Money. 

|! 

In  Present 
Money. 

sl 

•r  u 

(£* 

In  Present 
Money. 

Animals. 

s.     d. 
7  10 

s.     d. 
2T  6 

s.     d. 
IO  7 

s.     d. 
\l  Q 

J.      d. 

s.     d. 

x.     a'. 

Cart  horses.  .  .  . 

18.2 

"54  6 

21   f, 

64  1 

Saddle  horses  .  . 

=;8.ii 

176  Q 

144  o 

4  7i 

J-J   ioi 

l 

I  T   loi 

21,  7 

Geese  

O    ^i 

o  i4- 

I    Or 

O  A^ 

I    2i 

O  II 

' 

LIVE   STOCK  AND  FARM  PRODUCE. 


123 


The  prices  are  here  nearly  up  to  the  altered  relations  in 
the  coinage.  They  have  gone  through  the  same  process 
of  change  as  the  animals  quoted  in  Table  II.  It  is  differ- 
ent in  the  prices  of  farm  produce.  The  latter,  articles  of 
traffic  and  of  purchase  for  immediate  consumption,  still 
adhere  for  quite  a  while  to  the  customary  numeral  price, 
before  they  take  rank  in  the  new  scale. 

IV. PRICES    OF    FARM    PRODUCE    IN    MONEY    OF    THE 

PERIOD    AND    ITS    EQUIVALENT    PRICE    EXPRESSED 
IN    PRESENT    MONEY. 


I26o  T( 

'  135°- 

1351   T< 

>  1400. 

1401    T< 

>  154°- 

1550  T( 

)  1582. 

"o    • 

M 
C     . 

"o-d 

c    . 

'o   • 

«  *•• 

"o-d 

c    . 
S  >» 

«"° 
o'C 

s  = 

jj.2 

{;  2 

u'C 

Si  a 

•J) 

o  C 

Ss 

•r  v 

^0, 

2r 

fi« 

£* 

SB, 

zr 

£5 

cs 

s.      d. 

s.     d. 

s.     d. 

s.     d. 

s.     d. 

s.      d. 

s      d 

*.  rf. 

Wool,    Ib.  .  .    . 

o.3i 

0.9* 

°-3i 

0.9! 

O.2f 

o.8J 

o.7i 

Cheese,  "  

o.of 

O.  \\ 

o.of 

0.2^ 

o.of 

0.2^ 

o.ii 

Butter,  "  

o.o| 

0.2^ 

O.I 

0-3 

0-3| 

0.2| 

Lard    10  Ibs 

I  O 

1  O 

I  O 

•J.O 

Wax    Ib  

0.6 

1.6 

0.6 

1.6 

o  6} 

I  8| 

O  Q 

Eggs,  per  1  20.. 

•4* 

o.5 

I.6J 

2.6 

.... 

Expressed  in  the  value  of  the  new  coinage,  wool  is 
lower  by  nearly  twenty-five  per  cent,  than  before  Henry 
VIII. 's  time.  Cheese  is  but  i^d.,  while  the  average 
price  up  to  1540,  expressed  in  the  new  money,  would  have 
been  2\d.,  butter  2%d.,  against  3|^/.,  the  equivalent  of  the 
old  price  in  the  new  coins.  Eggs,  however,  are  much 
dearer.  They  are  at  double  the  price,  in  weight  of  silver, 
at  which  they  were  in  the  period  closing  with  1400,  and 
about  sixty  per  cent,  higher  than  in  the  early  part  of  the 
sixteenth  century. 


124 


MONEY  AND   PRICES. 


Thorold  Rogers  says  on  this :  "  I  cannot  but  think  that 
the  peasantry  in  the  growing  poverty  of  their  condition 
ceased  to  supply  the  articles  and  that  the  stint  led  to  this 
rise  in  the  price."  The  explanation  is  not  sufficient  in 
view  of  the  fact  that  butter  and  cheese  did  not  even  ex- 
perience a  rise  equivalent  to  the  monetary  changes.  In 
the  absence  of  a  more  satisfactory  explanation,  we  may, 
however,  accept  this  one  as  well  as  any  other.  In  pro- 
ducts of  domestic  industry  used  largely  on  the  farm  and 
by  the  people  in  general,  the  same  price  relations  exist. 
The  price  has  but  partly  responded  to  the  change  in  the 
monetary  system. 

V.— PRICES  OF  DOMESTIC  INDUSTRIAL  PRODUCTS  IN  MONEY 
OF  THE  PERIOD  AND  ITS  EQUIVALENT  PRICE  EX- 
PRESSED IN  PRESENT  MONEY. 


1261  to  1350 

1351  to  1400 

1401  to  1540 

1551  to  1582 

"S-e 

g.2 

1* 

8* 
h| 

jg 

"S-g 

v.° 

1* 

c   . 

%  >> 

E§ 
p.o 

£ 

"o-o 

«.2 

•_  c 
•c  « 

A,^ 

In  Present 
Money. 

IM 

o-o 
«.2 
•r  u 

£» 

Candles   Ib  

s.      d. 

s.      d. 

s.     d. 

s       d. 

s.      d. 

j        d. 

j.   </. 

o.  5J 
5-  5* 
o.  6| 

10.  1  1 

4-   4 

2.  11 

o.  9^ 

I-  31 
16.  4 
i.  7i 
32.  9 

12.  4 

8.  9 
2.  3f 

o.  9£ 
4-  4| 

I.    2f 

14.  5 
9-  5t 

5-  3 
i-   5i 

2.  4l 

13-    Of 

3-  7| 
43-  3 

28.  3f 

15.  9 
4-  3| 

0.    Ii 

o.  6| 
6.  G\ 

I.    2^ 

6.  o 

5-  5i 
5-  4i 
15.  7i 

4-  31 

O.Hj 

74-  9 

13-    2£ 

0.    3f 
I.  6f 
1  8.  of 

3-  7^ 
18.  o 
16.  4i 
16.  o^ 
46.  io£ 

12.11^ 

2.IoJ 

234-  4 
39-  7i 

0.    2| 

I.    2\ 

9-  4 

2.    9f 

ii-  3 

10.    l£ 

10.  6^ 
26.  2| 

4-  6J 

I.    2} 

159-    2 

29.  8 

Salt,  bu  . 

Tar,  brl  

Lime,  qu  

Bricks  1000     

Tiles  

Iron,  raw,  c\vt  

Iron,  wrought  

Board   nails,    and  bd. 
nails,  1000  

Lath  nails,  1000  
Lead,  pig,  fodder  .... 
Rope,  cwt  

Here  we  notice  the  same  relations  of  prices  in  the  new 
money  but  about    100  per  cent,  higher,  while  the   money 


MEDIEVAL  RATES  OF    WAGES. 


represents  only  one  third  of  the  value  of  the  old  coin. 
The  manufacturing  skill  of  the  nation  had  not  increased 
nor  were  the  tools  improved.  The  smaller  rise  in  prices 
than  in  the  changed  relations  of  money  values  between 
the  two  periods  is  primarily  due  to  the  fact  that  wages 
did  not  rise  in  the  proportion  that  money  had  been  de- 
based. Part,  however,  is  due  to  the  great  quantities  of 
building  material  which  had  come  into  the  market  from 
the  spoil  of  the  monasteries. 

VI.— DAILY  AVER  AGE  RATE  OF  WAGES  IN  MONEY  OF  THE  PERIOD 

AND  IN  ITS  EQUIVALENT  EXPRESSED  IN  PRESENT  MONEY. 


• 

1261  to  1350 

1351  to  1400 

1401  to  1540 

1551  to  1580 

Rate  of 
Period. 

In  Present 
Money. 

Rate  of 
Period. 

In  Present 
Money. 

Rate  of 
Period. 

In  Present 
Money. 

Rate  of 
Period. 

Carpenter,  highest  rate 
do.              average 
Mason  .        

d. 

4i 

3f 

3^ 

3 
7>\ 

3 
3ft 

d. 

»i 

9f 
10* 

9 
9t 

4 

d. 

& 

4 

5| 

5& 
6 

6} 

5 

d. 

I7l 
ISJ 

j6| 

I5f 

18 

i8f 
15 

d. 
6£ 
51 
6 

4 
6 
6 

51 

3 
SJ 

d. 
20| 
«*} 

18 

12 

18 
18 

!5i 
IO| 

I9l 

d. 
12 
IO- 
10 

7< 

9 
i<> 

I* 

10 

; 

Mason's  laborer  

Sawyer  

Tiler  or  Slater  

Bricklayer  

Thatcher  

Thatcher's  laborer.  .  .  . 

Saddler  

The  rate  of  wages  in  the  last  named  period  is  practically 
the  same  as  in  the  century  preceding  the  great  plague. 
The  higher  rate  of  wages  dating  from  that  event  main- 
tained itself  upon  the  same  level,  as  already  mentioned, 
for  nearly  two  hundred  years.  Though  wages  rose  nomi- 


126  MONEY  AND  PRICES. 

nally,  the  laborer  received  only  two  thirds  as  much  in 
actual  value,  as  before  the  debasement  of  the  currency 
chronicled  above. 

As  seen  in  Tables  I.,  II.,  and  III.,  the  chief  articles  of  sup- 
port for  himself  and  his  family,  the  corn  for  his  bread,  the 
malt  for  his  beer — a  very  important  item  for  mediaeval 
domestic  economy,  the  beans  and  peas — partly  used  in  his 
bread  and  in  his  porridge,  and  his  meat,  so  far  as  he  could 
indulge  in  it,  these  were  all  quickly  up  to  the  price  made 
by  the  new  money  of  3  out  of  i. 

No  wonder  that  his  condition  became  more  and  more 
depressed,  all  due  to  what  Thorold  Rogers  so  justly  stigma- 
tizes as  the  greatest  crime  ever  committed  by  a  tyrant 
against  a  patient  and  long-suffering  people. 

The  reader  can  understand  from  this  fact  why,  in  the  face 
of  inert  manufacturing  and  trading  conditions,  prices  of 
domestic  industrial  products  did  not  respond  to  the 
changes  in  the  moneys. 

The  price  changes  are  entirely  in  keeping  with  the 
change  in  the  rate  of  wages.  Iron,  raw  and  wrought,  ex- 
tremely high  in  the  middle  ages,  as  well  as  nails  and 
articles  manufactured  from  iron,  responded  even  less  to 
the  changed  money  conditions  than  salt,  lime,  bricks,  tiles, 
rope,  and  the  like.  Raw  iron,  in  the  period  from  1351  to 
1401  averaging  £28  the  ton  expressed  in  the  new  mone- 
tary system,  is  worth  but  £16  in  1401  to  1540,  and  £io6^s. 
in  the  actual  money  of  1560.  Wrought  iron,  averaging 
,£46  I2^s.  from  1401  to  1540,  is  £2$  4^.,  in  the  later  period. 
Board  nails  and  sixpenny  nails,  weighing  lolbs.  to  the 
thousand,  show  little  variation  from  the  prices  of  the  two 
preceding  centuries,  hence  have  not  at  all  responded  to 
the  revolution  in  the  currency, 


HIGH  PRICES  OF  METALS.  I2/ 

But  as  these  articles  are  quoted  at  higher  prices  in  the 
succeeding  period,  it  follows  that  much  of  what  has  been 
said  above  on  the  change  taking  gradual  effect  applies 
also  here. 

In  the  seventeenth  century  nails  are  quoted  by  the 
pound.  In  1645  the  price  paid  is  5^<af.,  in  1653  it  is  6d., 
more  than  six  times  the  present  price. 

Here  I  will  only  say  that  in  the  opinion  of  Thorold 
Rogers  nails  were  less  influenced  by  the  price  of  iron  than 
other  articles  wrought  from  this  metal.  "  The  article  was 
in  constant  demand,  was  within  the  skill  of  every  smith,  was 
regularly  kept  in  store  by  him  (as  I  can  well  remember 
before  the  days  of  machine-made  nails),  was  a  bye-product 
of  his  craft  when  he  was  not  engaged  in  any  definite  work, 
and  was  manufactured  from  scrap  iron,  the  better  for  being 
old  and  worn."  *  This  explains  well  enough  the  close  ad- 
herence to  the  former  nominal  price,  though  the  price- 
changes  in  all  other  commodities  were  extreme.  In  tex- 
tile fabrics  much  applies  of  what  has  been  said  concerning 
other  industrial  products.  The  price  does  not  rise  in  pro- 
portion to  the  changed  money  relations.  Nor  does  it  rise 
in  the  next  century,  as  we  shall  see  later  on,  to  the  level 
of  average  prices  of  1400-1540.  The  work  was  paid  by 
the  piece,  and  not  by  the  day  or  week  as  in  the  other  em- 
ployments of  which  I  gave  the  price  record  in  Table  VI. 
We  may  assume,  from  analogy,  that  scattered  cottagers 
and  peasants  are  not  more  able  to  enforce  their  demands 
for  better  remuneration  than  day  laborers  and  craftsmen 
in  towns,  who  can  combine  to  insist  on  increase  of  wages 


*  See  my  volume    The  Destructive  Influence  of  t/ie  Tariff,  on  the  nail- 
makers  of  the  Taunus  Mountains  in  Germany. 


128 


MONEY  AND  PRICES. 


in  conformity  with  the  depreciation  of  money.  It  is  not 
alone  likely,  nay,  it  is  a  well  known  fact,  that  piece 
workers  employed  in  domestic  industry  partake  more 
slowly  of  the  advances  due  to  changed  conditions  here 
delineated. 

I  give  here  the  prices  of  the  principal  textiles,  which 
had  become  at  an  early  epoch  articles  of  purchase  and 
sale,  as  gathered  by  Thorold  Rogers  from  the  records  of 
Merton  and  Oriel  Colleges,  Oxford. 


VII.— PRICES     OF     TEXTILE      FABRICS     IN      MONEY      OF 
PERIOD  AND  ITS  EQUIVALENT  PRICE  EXPRESSED 
IN  PRESENT  MONEY. 


THE 


1261  to  1350. 

1351  to  1400. 

1401  to  1540. 

1551  to  1582. 

*°-d 

IU 

"o-d 

1^ 

"o-d 

c    . 

M     >> 

"073 

«.2 
o  C 
.-  u 

«,  % 

8-c 

|i 

J'§ 

^     § 

|1 

($> 

^ 

go, 

^ 

£», 

^ 

£,£ 

s.  d. 

s.     d. 

j.    d. 

S.      d. 

j.     d. 

S.       d. 

s.     d. 

Table  linen,  doz.    ells 

3-3 

9.9 

6.7^ 

19-91 

6-9! 

20.5^ 

21.  0 

Shirting    " 

4-ii 

I2.3f 

8.4^ 

25-4 

6  i^- 

18.4^ 

13.10^ 

Canvas 

2.6| 

7.8J 

4-IO2 

14-7? 

46 

13.6 

7-7f 

Sacking                   " 

2.  IO 

8.6 

5-3f 

Cloths,     Piece    of    24 

Yards. 

ist  Quality  

7Q  8 

2^0  O 

83.2 

240.  6 

58.84 

176.1! 

161.0 

2d         "       

/  V- 

jy' 

99-64 

46.  6i 

48.0" 

144.0 

85.0 

34-1 

102.3 

76.0 

In  the  prices  of  southern  and  eastern  products  brought 
to  the  English  markets  a  multitude  of  causes  operate  and 
produce  changes.  The  differences  from  1350  to  1540  are 
so  slight  that  we  may  call  prices  almost  uniform.  Sugar 
at  I  shilling  a  pound,  equal  to  3  shillings  in  present 


PRICES  OF  TEXTILE  MANUFACTURES.         129 

money ,  pepper  at  is.  5</.,  or  4^.  ^d.  in  the  present  coin- 
age ;  currants  at  $d.  =  gd.  in  the  present  coinage ; 
rice  at  i^d.  to  2d.  =  4^  to  6d.  in  the  present  coin- 
age ;  high  prices  in  the  centuries  previous  to  the  change 
imputed  to  the  influx  of  silver  from  the  American  mines, 
and  declining  prices  for  all  of  these  commodities  in  the 
succeeding  periods,  prove  almost  anything  except  the 
geometrical  price-theory  of  quantity  of  money  covering 
quantity  of  merchandise.  To  this  question,  however,  I 
shall  return,  with  a  retrospective  view  of  the  case,  after 
having  given  descending  prices  down  to  our  time ;  and 
now  only  refer  to  prices  up  to  1582,  which  in  the  last 
named  period  show  only  an  approximation  to  the  new 
coin  multiple  of  3  in  some  of  the  items,  while  in  others 
barely  2  is  touched.  Sugar  is  even  lower  in  the  new 
coins  than  in  the  full  value  coin  in  the  second  half  of  the 
fourteenth  century.  Pepper  again  is  higher  than  the 
average  of  the  preceding  200  years  multiplied  by  three. 
Of  rice,  almonds,  and  some  of  the  spices,  other  than 
pepper,  the  prices  do  not  quite  approach  the  full 
change.  But  in  raisins  and  currants  the  prices  are  not 
even  50  per  cent,  higher  than  the  old  prices  in  the  heavy 
coinage. 

That  these  variations  are  caused  by  changed  and  shift- 
ing sources  of  supply,  differences  in  trade  connections,  and 
altered  transportation  routes  could  be  easily  proved.  But 
it  would  lead  to  a  more  extensive  treatment  of  the  ques- 
tion under  consideration  than  I  have  set  out  to  give  to 
this  subject,  were  I  to  follow  the  causes  of  price  variations 
for  each  article  brought  under  review.  I  point  this  out, 
however,  as  part  of  a  general  effect  on  prices,  with  which 
we  shall  have  to  deal  more  in  particular  in  the  sequel. 


130 


MONE  Y  AND   PRICES, 


VIII.— PRICES  OF  FOREIGN  PRODUCE,  NOW  KNOWN  UN- 
DER THE  NAME  OF  COLONIAL  PRODUCE,  IN  MONEY 
OF  THE  TIME  AND  ITS  EQUIVALENT  PRICE  EX- 
PRESSED IN  PRESENT  MONEY. 


1261  to  1350 

1351  to  1400 

1401  to  1540 

1551  to  1582 

*1 

4-* 

u 

•8-d 

u 

gx 

o 

M 

VI   V 

"o-o 

tn  u 

-—    " 

"  § 

S'S 

"  0 

II 

"  0 

v.S 

gfi 

CS 

£* 

£S 

^ 

£^ 

^ 

j.      d. 

,.      d. 

s.     d. 

,.  ^. 

s.     d. 

s.     d. 

j.     d. 

S.       d. 

Sugar,  doz.  Ibs. 

10.6 

37-6 

19.0 

57.0 

12.0 

36.0 

I2.IOf 

Pepper   "      " 

13.6 

40.6 

16.9 

50.3 

I7.I 

51.3 

58.0 

Saffron,  Ib  .  . 

8.5i 

25.5} 

14.2 

42.6 

II.  Ill 

35-ioi 

I8.4 

Cloves,    "... 

4-3f 

12.11^ 

8.9| 

Cinnamon,  Ib. 

3-4 

IO.O 

6-44 

Ginger,  Ib.  .  .  . 

1.61 

4-7i 

x.7| 

4-iOj 

2.O 

6.0 

3-9i 

Almonds,   cwt 

18.8 

56.0 

30-4 

91.0 

26.11^ 

80.  1  1 

70.10 

Raisins,       doz 

Ibs  

I  Q1 

-      nS 

2.5! 

Currants,     doz. 

T 

T 

•^•34 

Ibs  

•3  O3 

24- 

4.8 

Rice,  doz.  Ibs. 

I.O 

3.o' 

1.6 

4.6 

I.  II 

5-9 

*T"  v 

4-4 

England's  Financial  Condition. 

We  have  seen  now  that  up  to  the  year  1582  prices  had 
not  reached  the  old  level  if  computed  in  the  new  coins. 
Money  certainly  should  have  begun  by  this  time  to  circu- 
late somewhat  more  freely,  though  by  no  means  so  abun- 
dantly that  it  could  have  caused  a  price  revolution.  Now 
England  was  just  about  emerging  from  a  mediaeval,  agri- 
cultural state  and  beginning  to  take  an  interest  in  the 
affairs  of  the  new  era  that  had  opened  a  century  or  two 
before  in  the  advanced  states  of  the  continent.  A  greater 
amount  of  circulation  under  developing  conditions  in  the 
last  decade  of  the  reign  of  Elizabeth  would  have  been  in 
the  nature  of  things.  The  small  amount  of  the  recoinage 
of  1560  shows  plainly  that  no  extensive  trading  could 


CIRCULATION  IN  THE   SEVENTEENTH  CENTURY.      131 

have  been  done  unless  all  large  transactions  were  based 
on  weighing  the  silver  instead  of  paying  in  the  discredited 
coin.  A  large  stock  of  uncoined  silver,  plate,  etc.,  un- 
doubtedly came  into  the  mint  after  the  determination  of 
Elizabeth  not  to  allow  any  further  cheating  of  the  people 
by  a  tampering  with  the  currency  had  become  a  settled 
fact.  Still  in  all  the  forty-four  years  of  her  reign  *  she 
coined  not  more  than  ,£4,718,579  in  silver  and  £795,- 
137  in  gold.  It  is  plain  that  this  is  not  an  excessive  sup- 
ply for  a  people  beginning  to  use  money  more  freely  in 
buying  and  selling  than  at  any  previous  period  of  its  his- 
tory. The  home  stocks  of  silver  had  to  suffice.  There 
could  have  been  no  foreign  influx  to  explain  the  phe- 
nomenon as  there  was  no  extensive  trading.  In  the 
twenty  years  of  James  £1,641, 004  in  silver  and  .£3,666,- 
389  in  gold  were  coined,  according  to  the  same  authority. 
Much  of  these  sums,  was  obtained  from  recoinages  and 
other  melted-in  money  stocks.  During  the  reign  of 
Charles  I.  of  twenty-four  years,  .£8,776,544  in  silver  and 
.£3,319,677  in  gold  were  coined.  The  Commonwealth  in 
eleven  years  coined  £1,000,000  in  silver  and  £154,511  in 
gold.  Charles  II.  reigned  twenty-five  years  and  coined 
£3,722,180  in  silver  and  £4,177,253  in  gold.  James  II. 
in  four  years  coined  £3,722,180  in  silver  and  £4,177,283 
in  gold. 

The  recoinage  under  William  III.,  completed  in  1699, 
must  have  covered  nearly  all  the  circulation  in  existence 
from  the  previous  coinages.f  Still  the  total  coinage  under 

*  Ruding,  History  of  the  Mint. 

\  No  time  shows  such  wide-going  adulteration  of  coins  by  clipping  and 
sweating,  and  other  means  of  debasement  as  the  seventeenth  century.  In 
Germany  we  have  the  Kippers  and  W'ippcrs  (the  clippers  and  sweaters), 
competing  with  the  mint  authorities.  The  writers  of  the  time  compare 


132  MONEY  AND   PRICES. 

this  reign  amounted  to  .£7,093,074  in  silver  and  .£3,418,- 
889  in  gold.  But  England's  position  at  the  end  of  the 
seventeenth  century  was  quite  a  different  one  from  what 
it  was  at  the  beginning  and  in  the  middle  of  the  century. 
Her  trade  and  enterprise  were  beginning  to  give  her  rank 
among  the  first  nations  of  Europe,  while  in  the  first  half 
of  the  century  up  to  the  time  of  the  Commonwealth  we 
hear  of  Sweden  and  Holland  as  leading  powers,  but  Eng- 
land is  not  mentioned  and  plays  no  greater  part  in  the 
world's  drama  and  in  the  navigation  of  the  seas  than 
Poland  or  Russia.  During  that  period  the  circulation 
was  in  keeping  with  the  general  backwardness  of  the  peo- 
ple. Estimated  at  about  .£3,000,000  in  silver  and  gold  at 
the  time  of  Elizabeth's  death  and  .£4,000,000  at  the  end 
of  the  reign  of  James  I.  (Hume,  History  of  England"),  the 
middle  of  the  seventeenth  century  certainly  did  not  see 
the  stock  increased  to  very  large  proportion  beyond  that 

them  with  the  vilest  scum,  and  express  themselves  in  very  drastic  manner. 
"All  the  thieves,"  says  one  of  them,  "  that  were  hanged  in  a  hundred  years, 
have  not  stolen  as  much  as  the  Kippers.  The  Swedes  boiled  such  fellows 
in  molten  metal,  drowned  them  in  boiling  water,  or  hanged  them  on  high 
trees.  Oh,  that  such  sharp  execution  would  be  done  on  some  of  these  arch 
scoundrels  to-day."  This  extract  from  one  of  the  writers  of  the  time  gives 
an  idea  of  the  suffering  created  by  the  debasing  of  the  coins,  and  of  the 
feeling  of  universal  hatred  and  execration  created  thereby  against  the  perpe- 
trators of  this  cheating  of  the  people.  But  this  writer  consoles  himself  in  the 
expectation  '  Sed  nondum  omnium  dierum  sol  occidit,  the  punishment  can 
come  yet  later  on." 

In  France,  complaints  are  not  less  emphatic  and  no  less  well  founded. 

In  England,  by  the  time  of  the  recoinage  under  William  III.,  things  had 
come  to  such  a  pass  that  serious  troubles  were  apprehended  and  complaints 
could  not  be  appeased  any  longer.  No  good  coin  were  in  existence,  eitner 
being  driven  out  of  the  country  or  thrown  into  the  melting-pot. 

That  such  conditions  do  not  create  a  plethora  of  money,  such  as  under  any 
circumstances  could  create  a  general  rise  of  prices,  ought  to  be  plain  to  the 
dullest  understanding. 


CIRCULATION  IN  THE  SEVENTEENTH  CENTURY.     133 

sum,  when  the  money  supply  is  not  more  than  what  it  is 
shown  to  have  been  under  William  III.,  according  to  the 
recoinage  of  all  English  moneys.  The  opening  of  trade 
relations  with  Scotland  through  the  Union  under  the 
House  of  Stuart  drew  that  country  into  the  new  order 
developing  in  England  by  opening  a  market  for  her  pro- 
duce. This  coupled  with  the  more  active  English  home 
trading  under  James  I.,  would  easily  have  absorbed  all 
the  surplus  moneys  coming  into  England  under  the  limits 
set  down  above  for  the  possible  expansion  of  currency 
under  the  first  two  Stuarts.  Under  all  the  circumstances 
here  recorded  a  price  advance  could  not  have  been  possi- 
ble on  the  money-quantity  theory. 


CHAPTER  VII. 

The   Price-Changes   during  the  Seventeenth  Century  and  the  Money-Re- 
lations.— The  Natural  Causes  Contributing  to  the  Rise  in  Grain-Prices. 

THE   advance  in   conformity   with  the  change    in   the 
coinage,  and  not  yet  fully  covered   in  the  prices   of  the 
period  closing  with  1583,  as  shown  above,  is  the  only  one 
observable  at  first.-     We  see  prices  reach  that  point  only 
in  the  last  decade  of  the  sixteenth  century.     From  that 
time  on  prices  advance  steadily.     But  they  begin  to  de- 
o    cline  in  most  of  the  commodities  treated  here,  to  the  dire 
*    ]  disappointment  of  our  quantity  theorists,  at  a  time  when 
M.  the  growing  importance  of  England  in  trade,  industry,  and 
Vfy'rr7  colonial  extension  begins  to  pour  the  coveted  treasures 
,        Sinto  her  lap. 

ff  I 

'  In  order  to  get  a  view  of  the  price-changes  we  have  to 
follow  the  same  manner  and  sequence  as  in  the  preceding 
tables.  Here  I  will  set  side  by  side  in  parallel  columns 

(1)  the  prices  of  the  period  1401  to  1540  computed  in  the 
new  Elizabethan  coinage  for  the  assistance  of  the  reader ; 

(2)  the  prices  of  the  first  decade  of  James  I.,  i.e.,  1603  to 
1612  ;  (3)  the  prices  of  the  period  of  1613  to  1652  ;  (4)  the 
prices  of  1653  to  1702  ;  and  (5)  the  prices  of  1693  to  1702, 
the  decade  in  which  occurred  the  recoinage  of  the  cur- 
rency,   frightfully    debased    by    clipping,    sweating,    and 
shaving  down  of  the  coins. 

i34 


CHANGE   OF  PRICES  AV   CEREALS. 


'35 


I.— PRICES  OF    CEREALS,  PER  QUARTER,  IN  THE   PERIODS 
NAMED,  FROM  THE  BEGINNING  OF  THE  SEVEN- 
TEENTH TO  THE  BEGINNING  OF  THE 
EIGHTEENTH  CENTURY. 


1401  to 
1540. 

1592  to 
1602. 

1603  to 
1612. 

1613  to 
1652. 

1653  to 
1702. 

i<x)3  to 
1702. 

s.  d. 

s.  d. 

s.   d. 

s.  d. 

J.   </. 

j.   </. 

Wheat  

17  Il-r 

14.  Io4- 

-36.     -ji 

42.  84 

40    e. 

41.    2? 

Barley  

II.   2  3- 

IQ.    ^i 

IQ.    5 

21.   4 

21.    1 

22.    4j 

Oats  

6.  64 

II       ^a 

II   I  Of- 

14.11 

14.10 

15.    1^ 

Malt  

12.    1 

22.    4? 

IQ.IO 

24.    7 

21.    "5 

2?.    1 

Beans  

II.     IT 

IQ.IO 

IQ.    2 

2I.IO 

24.    5 

27.    Q 

Peas  

II      6 

IQ      4 

17.    5i 

22.11 

24.  6 

2Q.    Q 

Little  besides  the  destruction  of  the  Armada  has  hap- 
pened to  give  England  access  to  the  silver  finds  by  which 
the  sudden  rise  in  prices,  which  we  observe  in  the  second 
column,  is  usually  explained.  True,  some  rich  captures 
were  made.  Elizabeth  herself  did  not  disdain  partnership 
with  the  pirates  fitted  out  from  her  shores.  But  the 
wealth  gained  by  buccaneering  and  piracy  is  not  of  a 
lasting  nature.  Even  the  heavy  contributions  levied  on 
the  vanquished  by  the  conquerors  in  our  own  days  have 
but  a  fleeting  effect.  Prices  do  not  rise  permanently 
through  such  additions  to  the  money  stocks  of  a  country. 
No  other  sources  of  increase  of  money  are  discernible  in 
the  financial  history  of  the  two  decades  following  1582, 
and  yet  prices  of  corn  are  nearly  as  high  in  the  first  decade 
as  in  the  later  period  of  the  seventeenth  century,  when 
prices  have  reached  their  culminating  point.* 

*  The  limited  character  of  the  foreign  commerce  of  Great  Britain  in  the 
early  part  of  the  seventeenth  century  can  be  estimated  from  the  fact  that  in 
1610  the  imports  and  exports  were  ,£4,628,586.  The  customs  collected 
were  ,£148,075,  of  which  sum  nearly  three  fourths  were  collected  in  Lon- 
don. Yet  it  is  from  foreign  trading  alone  that  an  influx  of  specie  could  be 


136  MONEY  AND  PRICES. 

There  were,  however,  causes  at  work  which  fully  and 
satisfactorily  explain  the  extraordinary  rise  in  prices  in 
the  seventeenth  century.  The  state  of  agriculture  had 
not  made  any  progress  worth  speaking  of.  With  some 
notable  exceptions  in  different  parts  of  the  kingdom,  the 
people  adhered  closely  to  their  old  system  of  cultivation, 
and  were  as  obdurate  to  the  introduction  of  improve- 
ments as  in  the  fifteenth  and  sixteenth  centuries.  Hart- 
lib,  a  Dutchman  by  birth,  but  settled  in  England,  writing 
in  the  middle  of  the  century,  points  out  the  defects  of 
English  husbandry.  He  says  that  old  men  in  Surrey  re- 
member the  time  when  gardeners  first  came  there  and 
began  to  plant  cabbages,  cauliflowers,  turnips,  carrots, 
parsnips,  early  peas  and  rape,  which  up  to  that  time  were 
great  rarities,  but  which  were  seen  in  England,  having 
come  from  Flanders  or  Holland.  The  gardeners  got  land 
with  difficulty,  though  they  offered  enormous  rents  for  it, 
the  landowners  imagining  that  the  use  of  the  spade  would 
spoil  the  ground.  "  Even  now,"  he  goes  on  to  say,  "  gar- 
dening and  hoeing  is  scarcely  known  in  the  north  and 
west  of  England,  in  which  places  a  few  gardeners  might 
have  saved  the  lives  of  many  poor  people,  who  have 
starved  these  dear  years."  (Here  the  writer  refers  to  the 
five  years,  1646  to  1650,  in  which  a  real  famine  prevailed.) 

Onions  and  hops  were  imported  from  Flanders,  and 
"  even  plants  which  grow  wild  in  our  own  hedgerows,  but 
we  are  not  at  the  pains  to  cultivate."  Other  writers,  by 
the  advice  they  give  to  farmers,  show  plainly  enough  the 
undeveloped  state  of  agriculture  and,  in  fact,  of  most  of 
the  industries  of  the  country.  England  had  made  but 
slow  progress  in  these,  while  commerce,  trade,  and  bank- 
made  available  to  bear  on  prices.  See  Thorold  Rogers'  History  of  Agri- 
culture and  Prices  in  England,  vol.  v.,  p.  586, 


INCREASE   OF   TOWN  POPULATION.  137 

ing,  along  with  stock-jobbing,  began  to  attain  a  prominent 
position  in  the  economic  history  of  the  country.  By  the 
end  of  the  reign  of  James  I.  (1625)  foreign  commerce  had 
grown  to  ,very  nearly  double  what  it  was  in  1604,  if  the 
increase  in  the  revenue  from  customs  is  a  proof.* 

The  population,  which,  up  to  the  middle  of  the  reign  of 
Elizabeth,  had  been  rather  stationary,  grew  rapidly.  The 
towns,  large  consumers  but  not  producers  of  food  supplies, 
were  extending  in  numbers  and  population.  London, 
despite  its  extreme  unhealthiness  and  filthiness,  was  rap- 
idly filling  up.  It  had  500,000  inhabitants  at  the  end  of 
the  century.  The  increase  of  population  was  especially 
noticeable  in  northern  England.  The  emigration  of 
religious  exiles  from  Flanders  and  France  made  a  con- 
siderable addition,  and  the  development  of  the  textile 
industries  and  the  demand  for  English  products  stimu- 
lated town  population,  and  necessarily  increased  the 
demand  for  the  products  of  agriculture.  If  to  this  be 
added  the  generally  prevailing  poor  crop  years,f  inter- 
spersed with  a  number  of  years  of  actual  dearth,  and  some 
of  famine  and  plague,  we  have  an  explanation  for  the 
prevailing  high  prices,  which  is  sufficient,  and  with  which 
the  monetary  history  of  the  century  does  not  supply  us. 

*"  The  customs  in  1604  yielded  .£127,000  a  year;  they  rose  to  ,£190,000 
toward  the  end  of  the  reign.  The  customs  were  supposed  to  amount  to  five 
per  cent,  of  the  value  and  were  levied  upon  exports  and  imports." — Hume's 
History  of  England. 

\  Hume,  comparing  his  time  with  that  of  James  I.,  says  :  "  The  nation 
was  still  dependent  on  foreigners  for  their  daily  bread  ;  and  though  its  ex- 
portation of  grain  now  forms  a  considerable  branch  of  its  commerce,  not- 
withstanding its  considerable  increase  of  people,  there  was,  in  that  period 
a  regular  importation  from  the  Baltic,  as  well  as  from  France  ;  and  if  it  ever 
stopped,  the  bad  consequences  were  seriously  felt  by  the  nation.  Sir  Wal- 
ter Raleigh,  in  his  Observations,  computes  that  two  millions  went  out  at  one 
time  for  corn," 


I38 


MONEY  AND   PRICES. 


We  find  a  fair  uniformity  of  average  prices  from  about 
the  year  1610  down  to  the  beginning  of  the  next  century. 
In  the  prices  of  animals,  meat,  and  farm  products  we  see 
the  same  coincidence. 


II.— PRICES    OF    ANIMALS     AND     FARM-PRODUCTS     FROM 

THE  BEGINNING  OF  THE  SEVENTEENTH  TO  THE 

BEGINNING  OF  THE  EIGHTEENTH  CENTURY. 


1401 
to 
1540. 

JS93 
to 
1602. 

1603 
to 

1612. 

1613 
to 
1652. 

l653 
to 
1702. 

1693 
to 
1702. 

s.    d. 

s.    d. 

j.     d. 

s.    d. 

J.     d. 

s.    d. 

Oxen      

81.4 

IO3.IO 

I2Q.8 

154  8 

143.8 

166.8 

Sheep  

6.8£ 

9-°l 

Q.IO 

II-5 

II.  I 

II.  Oj 

Saddle  and  coach-horses.  .  . 
Boars  

176.9 
25.6! 

238.0 

38.7 

236.2 
4O.9 

298.0 
53-O 

332.O 

75-2 

332.8 
99.O 

I.  of 

I.llj 

24i 

2.3 

3.1 

3-4 

Farm  Products. 
Wool    Ib               

0  8J 

j        0.10} 

I  O 

O  IO 

O.Q 

Cheese    Ib       

O  2j 

]      0.8 

O  2^ 

O  A 

1» 

O  l£ 

o  /i4- 

Butter   Ib     

o  •?$ 

O  ± 

o  c 

o  <;i 

o  6 

o  6| 

Beef,  stone,  14  pounds  .... 

U0g 

1.6 

2-3 
^C  A^t 

2.5f 

2.  II 
12  A 

3.5^ 

2?   2 

3-6 

26  6\ 

Etrps   Der  1  20  . 

i  6£ 

1  7-?- 

1  1 

3^ 

7  ± 

The  rise  in  prices  shown  in  this  table  is  entirely  in 
accord  with  the  rise  in  the  prices  of  animals,  meat,  and 
farm  products  with  which  our  own  people  are  familiar  in 
sections  of  the  country  going  through  the  same  process  of 
evolution  as  England  was  then  passing  through,  and  it  is, 
indeed,  entirely  in  keeping  with  the  economic  history  of 
the  world. 

The  price  of  oxen  in  the  first  column  is  stated  as  Sis. 
4^/.,  instead  of  6is.  gd.,  the  price  in  the  first  table  pre- 
sented by  me,  for  the  period  1401  to  1540.  This  is  to 
bring  the  weight  relation  up  to  average  weight  of  the 


STATIONARY   PRICE    OF    WOOL.  139 

beginning  of  the  seventeenth  century.  The  various  state- 
ments as  to  the  size  of  oxen  in  the  former  period  and  the 
abundance  of  testimony  as  to  the  size  of  the  animals  in 
the  seventeenth  century,  fully  explain  this  change  of 
price,  and  show  that  the  prices  were  nearly  equal  on  the 
basis  of  weight.  For  the  other  animals  quoted  weights 
are  not  given.  Hence,  we  have  to  make  whatever  mental 
allowance  may  be  found  profitable. 

Sheep  do  not  seem  to  have  increased  in  weight.  They 
are  still  quoted  at  38  to  40  Ibs.  Nor  does  the  price 
change  very  much  in  the  hundred  years,  all  things  consid- 
ered. Hogs  have  grown  excessively  dear  at  the  end  of 
the  period.  (The  boars  of  the  record  are  full  grown,  fat 
animals.)  The  carcass  is  estimated  as  averaging  about 
3  cwts.  Pork  is  sold  to  the  navy  at  4^.  a  stone  (of  14  Ibs.) 
This  is  ^\d.  a  pound,  a  rise  of  something  over  a  hundred 
per  cent,  over  fifteenth  and  sixteenth  century  prices. 
But  as  boars  are  from  three  to  four  times  as  high  it  follows 
that  the  size  of  the  animal  has  considerably  increased  in 
the  time. 

The  prices  of  cheese,  butter  and  eggs  rise  on  the  same 
scale  and  likewise  remain  at  a  high  level  all  through  the 
century,  a  clear  proof  of  the  existence  of  a  natural  cause 
of  general  and  wide-reaching  effect.  That  it  was  not  the 
change  in  the  monetary  supply  is  best  illustrated  by  the 
price  of  wool.  Wool  remains  almost  stationary  in  price. 
All  the  entries  collected  by  Thorold  Rogers  approximate 
to  the  averages  here  quoted.  Now  of  all  articles  wool 
ought  to  be  enhanced  in  price  fully  as  much  as  other 
agricultural  products  if  the  rise  is  due  to  increase  in  the 
money  supplies,  abundance  of  the  silver  finds,  cheapen- 
ing of  silver  or  money  or  whatsoever  else  may  be  used  in 
support  of  "  the  natural  law.  "  Wool  was  throughout  the 


140  MONEY  AND  PRICES. 

Middle  Ages  the  only  article  of  export.  It  remained  at 
this  more  modern  period,  if  not  the  only,  at  least  the 
chief  article  of  export.  It  was  in  universal  demand 
abroad,  and  in  consequence  of  the  development  of  woollen 
manufacture  in  the  north,  became  of  constantly  increas- 
ing importance  in  England.  If  the  increasing  "abundance" 
of  money  had  caused  the  rise  of  prices,  wool  ought  to 
have  been  of  fully  three  times  the  value  it  held  at  the 
beginning  of  the  century.  But  instead  of  this  it  was  not 
alone  not  higher,  but  is  about  the  only  article  which 
taken  by  weight  and  value  of  silver  is  actually  cheaper 
than  we  find  it  in  the  average  of  prices  of  the  250  years 
that  preceded  the  reign  of  Henry  VIII.  We  find  it 
cheaper  at  the  end  of  the  century,  in  a  decade  of  extreme- 
ly high  prices,  than  at  the  end  of  the  sixteenth  century, 
when  the  prices  of  other  commodities  did  not  yet  show 
even  the  full  effect  of  the  alteration  in  the  coinage. 

What  Thorold  Rogers  says  on  this  score  thoroughly 
explains  the  cause : 

".  .  .  The  price  of  wool  was  lower  in  the  seventeenth  century  on 
the  whole  than  it  was  at  the  end  of  the  sixteenth.  It  is  very  prob- 
able that  as  agriculture  improved,  or  as  better  supplies  of  winter  fodder 
were  forthcoming,  more  sheep  were  kept  by  the  farmers,  and  that  the  price 
of  wool  fell  by  reason  of  greater  plenty.  So  in  the  last  quarter  of  the 
eighteenth  century  wool  was  cheaper  than  it  was  in  the  seventeenth,  ranging 
from  14-r.  to2or.  the  tod."*  (The  tod  is  28  Ibs.,  hence  from  6d.  to  8f</. 
the  Ib. 

Considering  all  the  facts,  the  reader  will  admit  that  the 
money-quantity  theory  fails  here  lamentably. 

*  History  of  Agriculture  and  Prices  in  England,  vol.  v.,  p.  410. 


THE  NATURAL    CAUSES  OF  PRICE  INCREASE.       141 


III.— PRICES  OF  INDUSTRIAL  PRODUCTS  FROM  THE  BEGIN- 
NING  OF  THE  SEVENTEENTH  TO  THE  BEGIN- 
NING OF    THE  EIGHTEENTH  CENTURY. 


1400 
to 
154°- 

1593 
to 
1602. 

1603 
to 
1612. 

1613 

to 
1652. 

1653 

to 
1702. 

1693 

to 
1703. 

s.  d. 

J.  d. 

S.   d. 

s.  d. 

s.  d. 

s.  d. 

Candles   Ib    

O.    "\\ 

o  iU 

O      4 

O      A.\ 

0  e,l 

o  si 

Salt   bu   

i     6£ 

2   2 

I  .  IO 

2      8 

*2    6i 

u.sj 

T.1     O 

Tar    brl  

18.  of 

Lime,  qu  

1       7i 

4   4?- 

4    II  i 

4    IO 

40 

5     A 

Bricks,  per  1000  

18.  o 

n  2 

14      7l 

14      Qs 

18  8 

IQ     1r 

Tiles,           "         

16.   4i 

I-l.O? 

11.  1  1 

14      1  V 

IQ   4 

17  8 

Iron,  cwt  

16.  c4 

11.6 

12      O 

Iron,  wrought,  cwt  

46.  loi 

•I  -I.  I 

12.    8 

IQ      1 

17  «; 

18  oi 

Board  nails,  10  Ib.  per  1000 
Lath  nails,  3  Ibs.  per  1000.  . 
Lead    pinr   the  fodder  .  . 

12.  Il} 
2.!0i 
314      4 

1.4 

i-   5 

5-  o 
i.  4! 
164  10 

i-7 
169  o 

i-4 

i 
Rope,  cordage,  cwt  

39-   7i 

28.6 

30.  o 

28.  o 

43-0 

20.  0 

The  price-changes  recorded  in  this  table  are  entirely 
in  accord  with  certain  economic  changes  referred  to  be- 
fore. I  will  briefly  touch  upon  the  causes  to  which  they 
have  to  be  traced.  Candles  would  undoubtedly  follow 
the  price  of  tallow.  The  rise  is  proportionate  to  that  in 
meat  and  live  stock.  In  fact  these  had  but  a  moderate 
rise,  entirely  due  to  a  somewhat  greater  demand. 

Salt  is  not  much  higher  than  in  the  earlier  period  up  to 
1612.  It  rises,  however,  to  a  moderate  extent  up  to  the 
end  of  the  century.  This  is  explained  by  the  fact  that 
salt  was  obtained  from  evaporation  by  solar  heat.  Thus 
primitive  were  the  methods  yet.  The  many  inclement 
seasons,  which  produced  the  dearth  and  high  prices  of 
corn,  interfered  with  obtaining  salt  in  sufficient  supply. 
Lime,  bricks,  tiles,  and  other  building  materials  show  a 
declining  tendency  up  to  the  middle  of  the  century. 
They  are  considerably  below  the  prices  ruling  in  the 

*Average  of  1653  to  1692  only. 

fin  1694  a  tax  of  if>s.  the  quarter  was  put  on  foreign  salt  and  of  8s. 
on  English  salt.  This  was  increased  to  53^.  $d.  on  foreign  and  26j. 
8a.  on  English  salt.  The  tax  remained  in  force  till  1732.  This  explains 
the  higher  price  in  the  last  columns. 


142 


MONEY  AND   PRICES. 


earlier  centuries  covered  by  this  inquiry.  They  rise  to 
about  the  average  prices  of  the  first  column  (1400  to  1540) 
in  the  second  half  of  the  century.  The  rise  in  wages,  as 
we  shall  see,  explains  this  rise.  Some  doubts  are  raised 
that  bricks  and  tiles  are  as  carefully  made,  the  materials 
as  carefully  selected  in  the  sixteenth  century  as  in  the 
fourteenth  and  fifteenth. 

Iron  shows  a  downward  tendency  from  prices  of  the 
first  column,  though  still  very  high.  But  nails  are  very 
much  lower.  They  were  substantially  the  same  at  the 
end  of  the  seventeenth  century  as  in  the  middle  of  the 
sixteenth.  In  rope  and  cordage  we  observe  a  rise  in  the 
middle  and  a  decline  at  the  end  of  the  century.  This, 
taken  in  connection  with  the  rise  in  wages  over  the  period 
1540  to  1580  or  1600  would  naturally  indicate  an  increas- 
ing manufacturing  skill  and  a  possibly  cheaper  supply  of 
the  raw  material,  flax  and  hemp. 

The  rise  in  wages  from  the  time  of  the  Commonwealth 
is  apparent  in  the  following  table. 

IV.— DAILY  AVERAGE    RATE    OF    WAGES    PAID   FROM  THE 
BEGINNING  OF  THE  SEVENTEENTH   TO  THE  BEGIN- 
NING OF  THE  EIGHTEENTH  CENTURY. 


1401  to 
1540. 

I5<53    t° 

1602. 

1603  to 

1612. 

1613  to 
1652. 

1653  to 
1702. 

1693  to 
1702. 

Carpenter   highest  rate  

d. 
2O| 

d. 
I21 

d. 
Ill 

d. 
I6i 

d. 
24.1 

d. 
"3O 

"           average.  .  . 

I7l 

12 

12 

I-ji 

2I1 

2rl 

Mason    highest  

18 

I4i 

I41 

IQ 

272 

32i- 

Mason's  laborer*  

12 

12 

12 

I4f 

2O  * 

28 

Sawyer  

18 

II 

H| 

l6i 

TQ\ 

iqi 

Tiler  or  slater        

18 

12 

12 

Idi 

loi 

T-7 

Bricklayer  

12* 

i*  i 

I-Ji 

Is 
26 

1O 

Thatcher  

ie,» 

Thatcher's  laborer  

i 

IOi 

Plumber  

I'll 

1C 

i/i 

I7l 

2o5 

T*i 

Laborer  to  artisan  

12 

8 

8 

i 
94- 

111 

I  8£ 

Women's  ordinary  work  

4 

5 

4 

i 

5£ 

4* 

*  In  the  first  column  we  have  recorded  the  wages  of  a  mason's  laborer  ; 
in  the  subsequent  columns  the  wages  denote  the  average  rate  paid  to  masons 
in  general. 


THE   SUFFERING  DUE  TO  MONETARY  CHANGES.      14$ 

What  with  the  higher  cost  of  grain,  meat,  cheese,  and 
malt,  everything  necessary  to  his  maintenance,  and  the 
lower  wages  he  received,  the  workingman's  condition  in 
the  first  half  of  the  seventeenth  century  was  deplorable 
in  the  extreme.  It  was  never  so  wretched  before  nor 
after.  All  cereals  and  food  supplies  were  more  than 
double  the  price  of  the  1400  to  1540  period.  Wages, 
however,  were  by  one  fourth  less  than  in  that  period,  both 
computed  on  the  new  money  basis  for  this  comparison. 

It  is  perhaps  more  than  a  mere  coincidence  that  ajaout 
the  time  of  the  overthrow  of  the  royalists  by  the  parlia- 
mentary army  wages  begin  to  rise.  In  the  second  half 
of  the  century  they  stand  on  an  average  about  one  fourth 
above  the  rate  of  our  first  column,  and  in  the  last  decade 
from  20  to  25  per  cent,  more  is  paid  than  has  been  the 
average  rate  for  the  half  century  which  it  closes. 

With  all  this,  however,  the  laborer  was  by  no  means 
able  to  command  as  much  of  the  necessaries  of  life  as  in 
the  period  previous  to  the  debasement  of  the  coinage  and 
the  change  of  the  currency.  Here  again  I  will  quote 
Thorold  Rogers,  as  to  the  true  condition  of  labor  of  that 
time,  corroborated  by  Macaulay,  who  draws  a  still  gloom- 
ier picture  than  seems  warranted  by  the  rates  of  wages,  so 
carefully  collected  by  Thorold  Rogers.* 

"  All  kinds  of  labor  obtained  a  rise  through  the  seventeenth  century,  but 
the  rise  was  necessary,  in  order  that  labor  should  even  live.  Wages  had 
been  driven  down  to  starvation  point,  and  as  far  as  we  know,  or  shall  ever 
know,  the  mass  of  the  people  acquiesced  in  its  misery,  and  believed,  as  it 
was  taught  from  thousands  of  pulpits  to  believe,  that  their  degradation  was 
Providential,  and  must  be  borne  with  resignation.  The  patriots  of  the  first 
half  of  the  century  and  the  profligates  of  the  last  half  were  equally  indiffer- 
ent to  the  misery  of  the  poor,  upon  whose  labors  they  lived.  It  is  no  wonder 

*  Thorold  Rogers,  Hist,  of  Agr.  and  Prices,  vol.  v.,  662. 


144 


MONEY  AND  PRICES. 


that  one  of  those  later  patriots,  Fletcher  of  Saltoun,  who  was  a  republican 
for  the  rich  and  well-born,  but  had  no  interest  for  the  fortunes  of  the  work- 
man, should  have  suggested,  as  part  of  the  noble  edifice  of  liberty,  that  the 
mass  of  the  people  should  be  doomed  to  hopeless  bondage. " 

The  rise  in  wages,  so  necessary  to  enable  the  working- 
man  to  exist,  does  not  show  in  the  price  of  the  products 
of  manufacturing  industries,  as  we  have  observed  in  Table 
III.  and  see  repeated  in  the  annexed  table,  which  gives 
the  prices  of  textile  fabrics. 


V.— PRICES  OF  TEXTILE  FABRICS,  FROM   THE   BEGINNING 

OF  THE  SEVENTEENTH  TO  THE  BEGINNING  OF 

THE    EIGHTEENTH  CENTURY. 


1400  to 
1540. 

'591  to 
1602. 

1603   tO 

1612. 

1613  to 
1652. 

1653  to 
1702. 

1693  to 
1702. 

Ordinary   table    linen,* 
doz   yds  

s.   d. 
2O     ^ 

s.   d. 

16    o 

s.  d. 
16  \\\ 

s.   d. 

18    <; 

s.   d. 
17     7 

J.   d. 

16    8£ 

Shirting  linen,  doz.  yds. 
Canvas,                 "       " 
Sacking,                "      " 

Cloths,  piece  of  24  yards. 
1st  quality  

18.  4i 
13.  6 
8.  6 

176    li 

20.    l| 

9-  Sf 

8.  o 

\A~I      A\ 

14.  6 

8.  8J 

1AA      6 

13-  7 
9-i<4 

14.  4 
ii.  3 

8.  o 

TOC       7 

15-  6 

1  80     O 

2d        "       

1.1.1      O 

114    o 

130    8 

1  lj      2 

126    6 

1  2O     O 

3d 

102    3 

46  10 

A.8       A. 

61  ioi 

68    \\ 

CI       A 

Imported  cloths. 
Best  cloth  per  yard.  .  .  . 
Velvet  per  yard  

ir.  5 

20    8 

16.  7 

01       li 

25.  8 

22      A 

19.  o 
26    8 

19.  o 
30    o 

Scarlet  cloth  per  yard  .  . 

45.  o 

*  There  are  two  qualities  quoted  in  this  period  (1593  to  1702),  second  best 
and  ordinary.  Considering  the  progress  made  in  this  century  in  manufac- 
turing industries  I  adopt  for  comparison  with  mediaeval  prices  the  lower 
price  column  of  Thorold  Rogers'  tables.  I  am  sure  the  mediaeval  linens 
of  home  manufacture  do  not  lose  in  the  comparison.  The  finer  qualities  were 
imported  then,  and  largely  so  yet,  in  the  century  here  in  review,  mainly 
from  Holland  and  the  Rhine  country. 


THE    TEXTILE  INDUSTRIES.  14$ 

The  rate  of  pay  in  textiles  is  by  the  piece,  or  the  yard, 
in  weaving ;  by  the  pound  in  spinning.  The  yarn  is 
bought  by  some,  by  others  made  at  home  in  the  winter 
time,  and  given  to  the  village  weaver.  The  same  was  the 
case  in  Germany  within  my  own  recollection  and  may  be 
found  so  still,  to  some  extent.  The  home-spun  linens 
sold  at  the  fairs  and  found  in  the  shops  in  Germany  give 
unmistakable  evidence  of  this.  Being  a  by-industry, 
wages  and  piece  rates  remain  stationary  long  after  prices 
in  all  other  directions  have  gone  up.  Large  quantities  of 
goods  are  produced  in  this  manner  and  become  collec- 
tively a  great  staple  product  of  trade.  The  chief  processes 
wherein  superior  skill  is  displayed  are  the  bleaching  of 
linen,  dyeing  and  finishing  of  woollens,  and  getting  them 
ready  for  the  market.  The  greater  dexterity  brought 
over  from  Flanders  in  the  earlier  period  and  by  the 
Huguenots  in  the  later  period  and  the  low  rate  of  pay  in 
the  spinning  and  weaving,  mainly  yet  cottage  industries, 
undoubtedly  explain  the  otherwise  strange  fact  that  prices 
of  domestic  textile  fabrics  are  rather  lower  than  higher  at 
the  end  than  at  the  beginning  of  the  century. 

I  have  included  imported  cloths  and  velvets  in  this 
table,  more  with  a  view  of  pointing  out  their  high  prices 
as  compared  to  present  prices,  than  their  prices  at  the 
different  periods  of  the  seventeenth  century. 

In  English  textiles  the  width  and  quality  are  much  better 
known.  Hence,  a  comparison  is  more  trustworthy.  So 
far  as  quality  is  concerned,  the  tendency  is  in  favor  of  the 
later  products  of  the  English  loom.*  Certainly  the  price 

*  "  In  so  little  credit  was  the  fine  English  cloth  even  at  home,  that  the  king 
[James  I.]  was  obliged  to  seek  expedients  by  which  he  might  engage  the 
people  of  fashion  .to  wear  it.  The  manufacture  of  fine  linen  was  totally  un- 
known in  the  kingdom." — Hume,  History  of  England. 


146 


MONEY  AND  PRICES. 


revolution  has  so  far  shown  a  strange  perverseness  in 
producing  the  contrary  effect  in  almost  every  instance 
where  rising  prices  could  be  attributed  to  changed  money 
relations.  In  domestic  industrial  products,  prices  cer- 
tainly do  not  respond.  In  produce  imported  from  the 
tropics,  it  might  be  expected  that  the  prices  should  rise 
in  conformity  with  the  doctrine  that  the  increasing  sup- 
ply of  money  or  money  stocks  raises  prices  proportion- 
ately, etc.  But  even  this  hope  is  disappointed,  as  will  be 
seen  from  the  following  table. 

VI.— PRICES    OF    FOREIGN    PRODUCE,    FROM    THE    BEGIN- 
NING OF  THE  SEVENTEENTH   TO  THE   BEGINNING 
OF  THE  EIGHTEENTH   CENTURY. 


1400  to 

1540- 

1593  to 
1602. 

1603  to 
1612. 

1613  to 
1652. 

1653  to 
1702. 

1693  to 
1702. 

f.  d. 

J.   d. 

j.   d. 

s.   d. 

s.   d. 

s.   d. 

•?6. 

IQ       li 

2O.    "\\ 

IQ.    6 

II.   44- 

12.    oi 

ci.   a 

46.      f, 

28.    2i 

24.  8 

22.    7 

17.  8 

•3C    io4 

12  Il4- 

8 

6    \\ 

7  II 

8.  24- 

IO 

B 

A    II 

e     i 

6    q 

6     2 

6' 

2.    Q 

I     e 

I     "?1 

O.    QT 

o.  7* 

Almonds,  cwt  

8o.Il} 

Raisins,   doz.  pds  
Currants    "       "    

r       ~:t 
5-    3T 
12     24- 

4.1(4 

c       Q3 

4-   li: 
c  iii 

5-  i 
e.io 

5- 
6    lA 

4-  3} 

e.  4. 

Rice           "      "   

e     Q 

6    oj 

6    o£ 

c     o 

•?.  4i 

a.   a 

Prunes,      "      "   

•a.   7 

•     f 

2.    74- 

2.    6 

3.  ol- 

4.   O 

Sugar  commanded  excessive  prices  in  the  middle  ages 
and  was  away  out  of  reach  of  the  common  people.  Even 
kings  and  princes  used  it  very  sparingly.  Duke  William 
of  Saxony,  in  the  middle  of  the  fifteenth  century,  stands 
recorded  as  paying  i  thaler  and  8  groschen  for  one  pound 
of  sugar  (about  $i  of  our  money  reckoned  .in  the  value 
of  silver  of  that  time).  In  England  it  seems  to  have  been 


DECLINING  PRICES  OF  SOUTHERN  PRODUCE.      147 

dearer  yet,  the  country  being  farther  removed  from  the 
sources  of  supply,  of  which  Egypt  was  the  chief.  In 
1440  to  1450  the  average  price  was  24  shillings  for  a 
dozen  pounds,  which  calculated  in  the  present  coins  is 
equal  to  6  shillings.  *  In  the  first  half  of  the  seventeenth 
century  it  was  still  high,  though  only  one  fourth  of  the 
above  mentioned  price,  i.  e.,  about  I  shilling  7  pence  to  I 
shilling  8  pence  a  pound.  But  in  the  second  half  of  the 
century  a  great  decline  takes  place.  It  is  but  about  I 
shilling  a  pound.  New  sources  of  supply,  Brazil  and  the 
British  plantations,  begin  to  make  the  onslaught  on 
prices  which  in  our  days  culminates  in  making  sugar 
nearly  as  low  in  price  as  wheaten  flour  or  bread,  pound 
for  pound. 

In  spices  we  see  the  same  reversion,  due  to  similar 
causes,  and  therefore  unnecessary  to  be  given  in  detail. 
Prices  were  kept  up  for  a  long  time  yet  by  the  big  profits 
of  traders,  and  only  began  to  fall  when  the  great  mo- 
nopolies were  broken  into  by  new  competitors  for  the 
trading  advantages  with  the  South  and  the  East. 

Of  this,  however,  I  shall  speak  more  fully  in  a  later 
chapter. 

*  In  the  coinage  value  of  silver  of  the  end  of  the  seventeenth  century 
the  equivalent  would  be  over  Sj.,  and  in  to-day's  coinage  value  nearly  gj. 
the  pound. 


CHAPTER  VIII. 

The  History  of  Prices  in  the  Eighteenth  and  Nineteenth  Centuries. 

IT  is  held  by  authors  of  repute  that  the  additions  to  the 
money  supplies  of  the  world  and  to  the  trade  of  England 
in  particular  showed  its  full  effect  on  prices  by  1660.  I 
have  pointed  out  elsewhere  that  the  commercial  history  of 
England  does  not  show  a  road  by  which  the  influx  of  the 
precious  metals  could  have  come  into  the  country.  No 
channel  exists  outside  of  commerce,  except  the  British 
silver  mines,  by  which  an  increased  supply  can  be  obtained. 
The  British  mines  certainly  are  not  on  record  for  having 
supplied  the  invigorating  stream.  The  foreign  commerce 
helps  us  as  little  as  the  mines  to  account  for  the  reputed 
wealth,  of  which  there  is  no  record  even  found  in  money 
statistics,  or  in  the  amount  of  the  recoinage  of  1696,  which 
can  be  considered  adequate.  The  commerce  of  England 
in  1573  shows:  imports,  .£1,650,000;  exports,  £1,880,- 
ooo;  in  1614,  imports,  £2, 141,000;  exports,  .£2,091,000; 
certainly  not  a  rapid  rise,  and  in  1687,  the  last  year  of 
James  II.,  and  the  year  before  the  advent  of  William  and 
Mary,  the  imports  had  grown  only  to  £4,200,000,  and  the 
exports  to  £4,087,000,  barely  a  doubling  of  the  trade  fig- 
ures in  the  eighty  years  of  the  Stuart  dynasty  and  of  the 
energetic  rule  of  the  Lord  Protector.  Truly  the  stimulus 
given  by  Cromwell  to  a  vigorous  outer  policy  was  strong 
enough  to  have  produced  a  great  rising  tide  in  foreign 

148 


TRADE  EXPANSION  IN  EIGHTEENTH  CENTURY.      149 

commerce.  Though  gaining  rapidly,  undoubtedly,  since 
that  time,  it  cannot  be  said  that  the  gain  was  of  such  a 
nature  as  to  account  for  the  imputed  inflation  of  prices. 
However,  excepting  agricultural  products,  in  which  the 
rise  of  prices  is  entirely  traceable  to  natural  causes,  as  ex- 
plained, no  rise  of  prices  is  apparent.  But  even  were  the 
facts  as  stated,  that  the  New  World  supplies  of  silver 
showed  their  full  effect  on  prices  in  about  1660,  it  would 
be  a  strange  incident  in  social  or  physical  dynamics  if  the 
effect  diminished  with  the  growth  of  the  propulsive  power. 

Surely,  things  soon  began  to  change.  England's  com- 
merce grew  rapidly  in  the  succeeding  century.  In  1714, 
at  the  time  of  the  death  of  Anne,  the  imports  were 
;£6,S  50,000 ;  the  exports,  ^8,000,000.  Fifty  years  later,  on 
the  accession  of  George  III.,  the  imports  were  ^10,292,000; 
the  exports,  .£16,039,000.  Another  forty  years  elapse,  and 
at  the  end  of  the  eighteenth  century  the  imports  had  grown 
to  .£31,420,000;  the  exports  to  ^"36,930,000. 

Money,  certainly,  had  become  plentiful,  compared  to 
the  narrow  supply  of  a  hundred  and  forty  years  before. 
The  guinea  had  long  ago  superseded  the  louts  d'or  as  the  key 
to  the  cabinets  of  Europe.  Frederic  had  much  of  the  three 
prerequisites  (money,  money  and  once  again  money  !  !) 
which  he  declared  essential  to  a  successful  conduct  of  war, 
supplied  by  England.  Her  fiscal  conditions,  quite  primi- 
tive under  the  Stuarts,  soon  expanded  to  more  ambitious 
dimensions  under  the  direction  of  William  III.  In  1684, 
"  fourteen  hundred  thousand  pounds  had  defrayed  the 
whole  annual  charge  of  government.  More  than  four 
times  that  sum  was  now  required"*  (1692).  England 
seems  to  have  borne  this  heavier  rating  with  ease,  judging 

*  Macaulay's  History  of  England,  ch.  xix. 


150  MONEY  AND  PRICES. 

from  her  generally  more  prosperous  condition.  Tradesmen 
and  people  in  general  showed  savings  and  looked  for 
investments.  It  was  still  a  difficult  matter,  outside  of 
mortgages  on  land,  to  find  a  place  where  to  put  money 
safely  at  interest.  Banking  even  was  an  innovation. 

"  In  the  reign  of  William  old  men  were  still  living  who  could  remember 
the  days  when  there  was  not  a  single  banking  house  in  the  City  of  London. 
So  late  as  the  time  of  the  Restoration  every  trader  had  his  own  strong  box  in 
his  own  house,  and  when  an  acceptance  was  presented  to  him,  told  down  the 
crowns  and  Caroluses  on  his  own  counter.  But  the  increase  of  wealth  had 
produced  its  natural  effect,  the  subdivision  of  labor.  Before  the  end  of  the 
reign  of  Charles  the  Second,  a  new  mode  of  paying  and  receiving  money  had 
come  into  fashion  among  the  merchants  of  the  capital.  A  class  of  agents 
arose  whose  custom  it  was  to  keep  the  cash  of  the  commercial  houses.  This 
new  branch  of  business  naturally  fell  into  the  hands  of  the  goldsmiths,  who 
were  accustomed  to  largely  traffic  in  the  precious  metals,  and  who  had  vaults 
in  which  great  masses  of  bullion  could  lie  secure  from  fire  and  from  robbers. 
It  was  at  the  shops  of  the  goldsmiths  of  Lombard  Street  that  all  the  payments 
in  coin  were  made."* 

On  these  deposits  the  goldsmiths  issued  notes,  which 
circulated  unquestioned  as  money.  "A  goldsmith's  note 
might  be  transferred  ten  times  in  a  morning ;  and  thus  a 
hundred  guineas  locked  in  his  safe  close  to  the  Exchange 
did  what  would  formerly  have  required  a  thousand  guineas, 
dispersed  through  many  tills,  some  on  Ludgate  Hill,  some 
in  Austin  Friars,  and  some  in  Tower  Street."  f 

The  treasures  of  plate  and  of  coin,  the  only  expression 
of  movable  wealth  of  the  past  period,  hidden  away  and 
closely  guarded  from  the  public  in  dark  corners,  under- 
ground, and  in  strong  boxes,  now  became  integral  parts 
of  the  money  circulation  of  the  country.  The  addition 
to  the  money  supply  thus  given  from  hoards,  now  un- 
locked, was  of  a  very  substantial  nature. 

*  Macaulay's  History  of  England,  ch.  xx.  \  Ibid. 


INCREASING  SUPPLY  OF  MONEY  STOCKS. 


The  additions  from  the  mines  to  the  general  supply  of 
the  precious  metals  of  the  world  were  also  more  copious 
in  the  eighteenth  century  than  in  the  seventeenth  cen- 
tury. Gold  especially  became  more  abundant,  and  helped 
greatly  in  expanding  foreign  commerce. 

Expressed  in  kilos  the  finds  were  in  annual  averages  of 
twenty  year  periods : 


Seventeenth  Century. 

Eighteenth  Century. 

1601—  20  

Gold, 
8,520 
8,300 
8,770 
9,260 
10,765 

Silver. 
422,900 
393,600 
366,300 
337.OOO 
341,900 

1701—20  

Gold. 
12,820 
19,680 
24,610 
20,705 
17.790 

Silver. 
355,600 
431,200 

533,145 
652,740 
879,060 

1621—40  

1  72  1—  4O.  . 

1641-60  

I74I-6O.  . 

1661-80 

1761—80  

1681—1700  

1781-1800  

Average  for  century 

Average  

9.123 

372,340 

19,121 

570,349 

The  average  output  of  gold  was  more  than  double,  the 
output  of  silver  more  than  50  per  cent,  in  excess  of  the 
seventeenth  century,  when  the  great  price  revolution  is 
said  to  have  occurred. 

The  causes  for  a  rise  of  prices  on  the  money  hypothesis, 
wanting  in  the  seventeenth  century  certainly,  were  very 
ample  in  the  beginning  of  the  eighteenth,  and  continued 
to  increase  with  its  progress.  The  causes  alluded  to  in  a 
previous  chapter,  operating  on  prices  in  Italy  and  Ger- 
many at  the  time  of  their  entering  into  their  state  of 
commercial  pre-eminence,  were  now  fully  developed. 
England  now  became  one  of  the  Great-Powers,  soon  to 
be  undisputed  mistress  of  tUe  seas.  If  anything  had  been 
wanting  to  give  sanction  to  her  claim,  the  rapid  growth 
of  the  public  debt  would  have  easily  silenced  the  scoffer. 
William  III.  in  1688  found  a  debt  of  £664,264,  which  at 
the  time  of  his  death  had  grown  to  £12,750,000.  The 


152  MONEY  AND  PRICES. 

interest  charge,  about  which  the  Stuarts  troubled  them- 
selves as  little  as  about  the  repayment  of  the  capital,  had 
grown  to  ;£  i, 200,000,  a  sum  equal  to  nearly  the  entire 
cost  of  the  government  barely  twenty  years  before.  At 
the  time  of  the  death  of  Anne  in  1714,  the  debt, 
through  the  participation  in  the  wars  of  the  Spanish  Suc- 
cession, stood  at  ^37,000,000;  in  1727  it  was  ^52, 500,000. 
Yet  the  growing  burden  was  borne  with  comparative  ease 
by  the  people.  The  moneys  for  the  great  armaments 
were  raised  with  seemingly  greater  facility  than  a  twen- 
tieth or  even  a  fiftieth  part  a  hundred  years  before.  The 
nation  had  fully  entered  into  a  state  of  money  economy, 
and  an  abundance  of  money  supply  and  flexibility  of 
commercial  conditions  had  supervened,  of  which  the 
times  previous  to  1650  had  had  no  conception. 

If  ever,  therefore,  there  was  a  time  propitious  for  a 
great  rise  in  prices,  the  first  half  of  the  eighteenth  cen- 
tury was. 

But,  as  we  shall  see,  the  very  reverse  happened.  The 
only  prices  that  had  shown  any  formidable  rise  in  the 
previous  century  were  wheat  and  other  cereals  and  live 
stock.  It  is  also  upon  the  extraordinary  rise  in  these 
products  that  the  argument  of  the  money  supply  was 
advanced.  To  the  present  day  a  rise  or  a  fall  in  wheat 
prices  is  made  the  subject  of  an  inquiry  by  governments, 
with  a  view  of  proving  or  disproving  the  altered  money 
supplies  as  a  cause.  In  the  decade  of  the  eighteenth  cen- 
tury following  the  period  covered  by  Thorold  Rogers' 
examinations,  prices  ruled  very  high.  A  number  of  very 
dear  years,  due  to  poor  harvests,  occurred.  The  average 
from  1704  to  1714  stood  at  42^.  9f^/.,  which  is  nearly  the 
same  as  the  average  of  prices  that  we  have  noted  down 
for  1613  to  1652,  and  something  over  2s.  above  the  aver- 


LOWER   CORN  PRICES.  I  53 

age  for  1653  to  1/02.     The  years  1709  and  1710  show  an 
average  of  6gs. 

Tooke,  quoting  from  Evelyn's  Diary,  says  : 

"  1708. — A  hard  frost  which  brought  on  a  prodigious  scarcity  of  provisions, 
more  in  France  than  in  England.  *  In  general  the  summer  was  cold  and  wet. 

"  1709. — The  queen,  in  her  speech  to  parliament,  complains  of  corn  being 
exported  at  such  high  prices  as  distressed  the  poor.  Exportation  prohibited 
for  one  year.  There  fell  this  year  rain  to  the  depth  of  26J  inches.  I  think 
the  mean  depth  of  rain  falling  in  England  is  19^  inches. 

"  1710. — Exportation  prohibited  for  one  year." 

Price  of  wheat  at  Lady-day  Sis.  yd.  It  is  unnecessary 
to  seek  further  for  an  explanation  of  the  high  average 
price.  The  decade  1715-24  gives  an  average  of  35^.  4*/., 
a  price  equal  to  that  of  1603-10;  and  1730-39  averages 
$is.  -$d. ;  1740-49  averages  $\s.  4^.,  which  is  less  than 
the  average  for  1593-1610;  the  decade  1742-51  shows 
only  27^.  6d. ;  and  for  1755-64  an  average  of  37^.  od.  is 
the  price  for  the  decade. 

The  years  1742  to  1756  were  especially  favored  with 
low  prices.  "In  some  of  those  years  there  was  a  large  ex- 
port, a  great  want  of  corn  being  experienced  in  the  south 
of  Europe  in  that  interval,  and  the  prices  at  home  were 
not  raised  very  materially."  f 

Sir  Frederic  Eden  quotes  the  January  prices  of  grain 
at  Mark  Lane  for  1742  to  1756  inclusive,  which  average 
as  follows  : 

Wheat l\s.  $d.    to    27^.  8</. 

Barley 13^.  <yi.     "     i6s.  yl. 

Oats iu.  3</.     "     I3J.  5</. 

*  This  we  shall  see  corroborated  in  the  following  chapter,  devoted  to  the 
price-history  of  France. 

f  Thomas  Tooke,  History  of  Prices  and  the  State  of  the  Circulation,  vol. 
i.,  p.  46. 


154  MONEY  AND  PRICES. 

The  average  price  for  this  period  is  53^.  4^.,  the  three 
quarters  of  the  three  cereals.  For  the  period  of  1261  to 
1350  the  same  three  quarters  averaged  36^.  6%d.  ;  for  1351 
to  1400  they  averaged  38.?.  ^d.  ;  for  1401  to  1540  they 
averaged  35^.  Sd.  (all  counted  in  the  Elizabethan  coinage). 
This  is  but  one  third  below  the  price  of  the  period  1742 
to  1756.  But  we  must  not  forget  that  the  silver  value  of 
the  time  covered  by  this  280  years  period  was,  roundly 
speaking,  about  forty  per  cent,  higher  than  in  the  middle 
of  the  eighteenth  century.  Bringing  the  prices  up  to  this 
ratio,  they  stand  $is.  as  the  average  for  the  period  1261 
to  1540 ;  and  53^.  $d.  for  this  fifteen  years  period  of  the 
eighteenth  century. 

The  improvements  in  agriculture  were  more  varied  and 
thorough  all  through  the  eighteenth  century  than  in  any 
other  period,  and  this  doubtless  has  much  to  do  with  the 
cheapness  of  prices  in  the  period  closing  with  1765. 
Though  the  population  of  England  and  Wales  had  grown 
from  5,500,000  in  1672  to  7,020,000  in  1754,  there  was  a 
large  balance  for  export.  The  balance  of  exports  over 
imports  for  the  ten  years  1742-51  amounted  to  8,869,190 
quarters  in  all  grains,  which  is  equal  to  about  7,000,000 
bushels  per  annum. 

"  There  was  scarcely  a  nobleman  or  country  gentleman  who  did  not  be- 
take himself  to  the  cultivation  of  lands,  not  merely  in  the  sense  of  keeping 
a  home  farm  in  his  hands,  which  he  managed  by  his  steward,  but  as  an  over- 
seer of  his  land,  and  as  an  experimenter  in  husbandry.  Writers  of  the  time 
wrote  that  country  gentlemen  talked  about  land  and  its  properties,  the  bene- 
fit of  certain  courses,  the  advantage  of  turnip  fallows,  and  the  economies 
of  agricultural  machinery,  about  breeds  of  cattle,  sheep,  and  pigs,  with  the 
same  interest  which  their  fathers  and  grandfathers  used  to  exhibit  on  the 
subjects  of  the  stable  and  kennel  only."  * 

*  Thorojd  Rogers,  Six  Centuries  of  Work  and  Wages,  p.  470. 


LOWER   CORN  PRICES.  155 

Arthur  Young,  writing  in   1772,  says: 

"  There  have  been  more  experiments,  more  discoveries,  and  more  general 
good  sense  displayed  within  these  ten  years  in  agricultural  pursuits  than  in 
a  hundred  preceding  ones,  and  if  this  noble  spirit  continues  we  shall  soon 
see  husbandry  in  perfection  and  built  upon  as  just  and  philosophic  principles 
as  the  art  of  medicine." 

Thorold  Rogers  speaking  of  the  great  improvements 
that  were  made  from  1720  to  1760,  says  that  they  were 
due  to  the  eagerness  with  which  landlords  strove  to  im- 
prove their  estates.  This  was  no  mere  caprice. 

"  The  truth  is,  the  gains  of  commerce  in  the  first  half  of  the  eighteenth 
century  were  very  large.  In  1750,  it  is  probable  that  the  city  of  London 
had  a  larger  commercial  income  than  the  rents  of  the  whole  House  of  Lords 
and  the  episcopal  bench.  Their  savings  supplied  the  elder  Pitt  with  his 
enormous  loans,  the  ^75,000,000  which  he  borrowed  through  his  adminis- 
tration, while  the  whole  rental  of  England,  twelve  years  after  the  Peace  of 
Paris,  was  not  more  than  ^16,000,000,  and  the  interest  on  the  whole  debt 
was  almost  one  third  of  the  rental."  * 

But  along  with  the  impetus  given  to  agriculture  by 
capital  and  intelligence  turning  to  the  land,  at  all  times 
the  most  grateful  recipient  of  their  favors,  the  seasons 
were  favorable  in  an  extraordinary  degree. 

But,  whatever  the  causes,  the  effects  on  the  fortunes  of 
the  poor  were  most  satisfactory.  Wages  were  somewhat 
higher  than  in  the  last  decade  of  the  seventeenth  century, 
after  the  advance  mentioned  in  the  preceding  chapter, 
and  more  than  double  the  average  rate  of  the  first  half  of 
that  century.  The  price  of  corn  and  bread  was  about 
one  third  below  the  average  of  the  seventeenth  century. 

Here  the  tides  change.  The  seasons  become  inclement. 
Not  alone  in  England  but  on  the  continent,  from  Ger- 


*  Thorold  Rogers,  Work  and  Wages,  p.  473. 


156  MONEY  AND  PRICES. 

many  and  from  France,  we  see  reports  of  failure  of  crops, 
scarcity  and  high  prices. 

The  average  price  of  wheat  for  the  twenty-seven  years, 
1767  to  1793,  was  4<os.  $d.  a  quarter.  The  whole  period 
shows  only  one  year  with  the  price  below  40^.,  while 
about  one  half  o'f  the  time  the  price  was  above  $os.  That 
this  sudden  turning  in  price  cannot  be  attributed  to  any 
but  natural  causes,  is  so  evident  that  an  explanation 
would  seem  a  waste  of  words. 

The  enclosures  during  the  century  amounted  to  3,000,- 
ooo  acres.  The  high  prices  certainly  were  an  encourage- 
ment to  cultivation.  These,  under  the  improvements 
alluded  to  above,  would  surely  have  created  an  abundant 
supply,  sufficient  to  turn  the  scale  in  prices  again,  had 
nature  been  at  all  a  factor  in  the  enterprise,  as  she  was 
undoubtedly  in  the  preceding  part  of  the  century. 

With  the  twenty  years  of  war  against  the  French  Re- 
public and  Napoleon,  which  the  Tories  were  able  to  per- 
suade the  English  people  to  regard  as  in  their  interest, 
while  in  fact  it  was  a  war  carried  on  by  the  masses  for  the 
classes  and  against  the  masses,  things  came  to  a  terrible 
condition  indeed. 

From  1795  to  1820  the  average  price  of  wheat  was  86^. 
\od.,  which  is  two  and  a  half  times  the  average  price  rul- 
ing in  the  fifty  years  closing  with  1765  and  fully  three  and 
a  half  times  the  price  of  the  fifteen  years,  1742  to  1756. 

In  all  this  distressing  time  only  three  years  are  on 
record  with  the  yearly  average  of  wheat  below  jos.  a 
quarter  (6os.,  67 s.  and  69^.),  and  nine  years  with  the 
yearly  average  between  lodr.  and  128^.  The  seasons  had 
much  to  do  with  this.  An  example  may  serve.  In  Janu- 
ary, 1799,  the  Gazette  averages  for  wheat  49^.  6d.,  barley 
29^.  6d.,  oats  19^.  lod.  But  the  winter  of  1799  was  ex- 


USAGES  DO  NOT  RISE  WITH  PRICES.  157 

tremely  rigorous ;  unfavorable  weather  continued  all 
through  the  year,  and  in  June,  1800,  the  Gazette  average 
stands  for  wheat  134?.  5*/.,  for  barley  6gs.  id.,  and  for  oats 
5u.  \d.  The  extremest  price  that  I  see  recorded*  is  for 
March,  1801  :  wheat  156^.  2d.,  barley  90?.  yd.,  oats  47^.  2d. 

The  causes  adduced  by  Tooke  in  explanation  of  the 
high  prices  of  1799-1801,  apply  with  equal  force  to  the 
whole  war  period — "  two  seasons  in  succession  of  extraor- 
dinary dearth  and  taxation, — and  impediments  arising  out 
of  the  war  to  importation  of  articles  which,  whether  as 
food  or  raw  materials  for  our  manufactures,  were  of  indis- 
pensable necessity."  The  money  movement  was  rather 
the  other  way,  more  an  outflow  than  an  influx.  The 
gold  premium,  of  course,  added  to  the  prices  of  the  pe- 
riod. But  this  is  a  measurable  quantity.  Par  in  1799, 
the  premium  slowly  rose  to  15  per  cent,  in  1809,  and 
reached  the  highest  point  of  about  36  per  cent,  in  Febru- 
ary, 1814,  which  it  held  for  a  very  brief  period  only.  In 
1816  the  premium  had  nearly  disappeared. 

Wages  had  been  pretty  uniformly  maintained  on  the 
level  gained  at  the  end  of  the  seventeenth  century. 
Through  the  period  of  low  prices  referred  to  above,  a  rising 
tendency  even  is  observed.  During  the  harrowing  years 
of  dearth  and  war  the  rise  was  small  where  it  did  occur. 
Arthur  Young  says,  in  Annals  of  Agriculture  \ : 

"  Various  statements  were  put  forth  by  different  classes  of  artisans,  set- 
ting forth  the  inadequateness  of  the  rise  of  wages,  including  the  most  recent 
advance  in  1801.  Among  other  statements  was  one  from  the  journeymen 
tailors,  by  which  it  appeared  that  their  wages  from  1777  to  1795  had  been 
£\  u.  9</.  per  week,  which  at  the  price  of  ~]]^d.  for  the  quartern  loaf  would 
purchase  thirty-six  loaves ;  while  the  utmost  advance  in  wages,  which  in 
1795  was  to  2$s.,  and  in  1801  to  2"js.  per  week,  would  purchase  only 
eighteen  loaves  and  a  half  in  the  latter  year." 

*  Tooke,  vol.  i.  f  Tooke,  vol.  i.,  pp.  226  and  227. 


158  MONEY  AND  PRICES. 

Other  statements  to  the  same  effect.  Factory  oper- 
atives fared  worse  still.  The  distress  amongst  them  was 
extreme. 

By  the  Greenwich  Hospital  table  the  wages  of  carpen- 
ters, bricklayers,  masons,  and  plumbers  appear  to  have 
experienced  little  advance.  The  rate  per  day  is  in 

1730-60.    1765-80.     1780-90.        1800. 

For  Carpenters 2s.  6d.  2s.  6d.  2s.  6d.  3^.  zd. 

"    Bricklayers 2s.  6J.  2s.  $d.  2s.  ^d.  3^.  od. 

"    Masons 2s.  "]d.  2s.  gd.  2s.  lod.  2s.  lod. 

' '    Plumbers 3-r.  od*  3J-.  od.  $s.  -$d.  -$s.  $d. 

It  was  not  before  the  year  1809  that  the  wages  of  arti- 
sans and  agricultural  laborers  were  nearly  double  of  what 
they  had  been  in  the  cheap  years  ;  while  other  labor  was 
by  no  means  so  well  paid. 

Considerable  numbers  of  those  employed  in  manufac- 
tures were  thrown  out  of  employment,  chiefly  those 
which  depended  upon  a  demand  for  export.  Many  of 
those  who  were  employed  and  had  an  advance  in  wages 
were  working  on  short  time,  and  thus  lost  in  one  way 
what  they  had  gained  in  another. 

And  all  this  for  the  glory  achieved  in  fighting  for  the 
preservation  of  foreign  mediaeval  institutions,  whose  final 
and  complete  overthrow  would  endanger  the  privileges  of 
the  landed  aristocracy  at  home.  Victory  in  such  noble 
cause  is  worthily  thrown  into  the  balance  against  all 
the  suffering  the  English  millions  endured.  They  re- 
ceived the  same  reward  in  recognition  of  their  heroic  self- 
sacrifice  as  the  people  to  the  south  of  the  North  Sea. 
The  latter  had  their  chains  fastened  again,  which  the 
French  Revolution  had  loosened.  The  English  had  the 

*  3.!-.  up  to  1740 ;  in  1745  =  3^.  6</. ;  1750  to  1760  =  2s.  ()d. 


PRICES.  159 

Corn  laws  continued  up  to  near  the  middle  of  the  century. 
The  riots  and  the  Chartists'  agitation  are  but  the  outward 
signs  of  the  desperation  to  which  the  people  were  driven 
by  their  suffering. 

The  facts  are  still  in  the  memories  of  living  men.  No 
one  attributed  the  high  prices  of  corn  to  an  over-supply 
of  the  currency,  to  an  appreciation  of  gold,  or  a  deprecia- 
tion of  silver.  Upon  the  abolition  of  the  corn-laws  prices 
gradually  declined.  We  see  the  gold  fields  of  California  and 
Australia  opened  and  a  golden  stream  poured  over  Europe 
within  30  years  equal  to  the  product  of  the  250  years  pre- 
ceding 1850.  But  excepting  periods  of  war,  failure  of  crops, 
and  scarcity,  prices  show  a  downward  tendency.  Wheat, 
1849-52  is  4Os.  lid.  a.  quarter.  During  the  period  of  the 
Crimean  War  (1853  to  1857)  the  average  is  65^.  $d.  The 
average  for  1858-1866  is  48^.  ;  for  1867  to  1877  the 
average  is  54^.  a  quarter.  The  population  is  growing, 
and  unless  the  supply  from  far-off  countries  increases,  or 
the  means  of  transportation  are  multiplied  and  freights  are 
cheapened,  there  is  no  reason  why  corn  should  not  go  to 
prices  ruling  before  the  time  the  corn-laws  were  abolished. 
But  now  prices  turn.  Wheat  averages  about  42^.  in  the 
decade  closing  with  1886.  In  1886  the  average  was  31^., 
a  price  which  maintained  itself  down  to  1892,  and  from 
then  it  has  gradually  fallen  to  a  point  below  any  ever  again 
reached  since  1591.  The  average  304  years  ago  was  i&s. 
i\d.  The  price  of  wheat  in  November  of  1894  stood  at 
iJs.Cjd.,  and  at  the  time  of  this  writing  (March,  1895,)  it 
is  quoted  at  19^.  \od.  This  is  equal  to  qs.  6d.  the  quarter 
or  6%d.  the  bushel  expressed  in  the  shillings  and  pence 
and  silver  ratio  of  the  thirteenth  century. 

We  have  previously  noted  the  fact  that  prices  of  farm 
products  and  of  meat  in  periods  of  limited  communication 


l6o  MONEY  AND 

and  of  production  for  home  supply,  do  not  rise  or  fall 
equally  with  the  more  susceptible  corn  products.  At  a 
time  when  wheat,  rye,  and  oats  commanded  a  uniform  and 
moderately  high  price  in  the  different  parts  of  Germany, 
and  when  railroads  had  been  open  for  some  years,  farm 
produce,  garden  products,  eggs,  butter,  cheese,  and  meat 
were  extraordinarily  low  in  comparison  with  contempo- 
raneous English  prices.  I  remember  very  distinctly  the 
prices  paid  in  Carlsruhe,  the  capital  of  the  Grand  Duchy 
of  Baden,  for  market  produce.  There  was  always  a  good 
deal  of  haggling  over  the  price  with  the  market-women. 
Butter  was  18  to  19  kreutzers  a  pound.  The  kreutzer  is 
exactly  two  thirds  of  a  cent  in  American  money.  This 
then  is  equal  to  12  cents  the  pound.  At  that  time  (1850) 
butter  in  England  was  worth  i\\d.,  the  price  paid  at 
Greenwich  Hospital,  which  is  about  double  the  German, 
inland,  price.  In  Mecklenburg,  where  things,  then,  were 
even  more  mediaeval  than  in  Baden,  butter  was  consider- 
ably higher,  while  other  farm  produce  was  on  a  somewhat 
lower  level  yet.  I  compared  notes  lately  with  gentlemen 
of  my  acquaintance  for  verification  of  certain  facts  relating 
to  this  subject.  The  explanation  is  that  a  good  deal  of 
butter  was  being  shipped  to  England.  This  extra  market 
raised  the  price  in  Mecklenburg,  while  other  produce  which 
had  to  find  consumers  at  home,  in  an  agricultural  country, 
where  most  people  raised  their  own  supplies,  kept  within 
the  low-price  sphere.  Eggs  were  sold  at  about  8  cents  a 
dozen.  The  English  price  at  that  time  was  %>2d.  for  12 
dozen,  or  about  14  cents  a  dozen.  Butcher's  meat,  ordi- 
nary pieces,  was  about  8  to  9  cents  a  pound.  Cabbages 
were  about  I  cent  to  i£  cents  a  head,  and  other  vegetables 
in  proportion.  Cherries,  prunes,  and  other  luscious  fruit 
from  2  to  3  kreutzers  (i^  to  2  cents)  a  pound.  All  this 


PRICES  OF  OTHER   COMMODITIES.  l6t 

has  changed  since  the  towns  have  absorbed  so  much  popu- 
lation, trade  and  commerce  have  developed,  and  the 
distribution  of  products  has  become  more  general. 

In  England  in  the  eighteenth  century,  we  still  observe 
the  range  of  prices  in  meats,  in  eggs,  butter,  and  cheese 
current  in  the  seventeenth  century,  even  in  years  when 
corn  was  dear.  They  rise  in  price  in  the  second  half  of 
the  nineteenth  century,  while  corn  was  becoming  cheaper, 
because  of  the  growth  of  industrial  pursuits  and  the  col- 
lection of  large  populations  in  an  increasing  number  of 
towns.  This  made  the  price  of  the  latter  articles  dearer, 
not  being  so  fit  for  transportation  from,  and  cultivation  in, 
far  distant  countries  and  opposite  hemispheres  as  wheat. 

Prices  of  Other  Commodities. 

The  prices  of  live  stock  would,  not  give  an  adequate 
idea  of  corresponding  value  at  different  periods  on  ac- 
count of  the  changes  in  weight  due  to  improvement  of  the 
breeds.  All  through  the  seventeenth  century  the  weight 
in  oxen  does  not  vary  much  from  the  average  of  588  Ibs. 
of  the  numerous  quotations  of  Thorold  Rogers.  The 
eighteenth  century  notes  improvement,  while  our  own 
time  sees  the  old  weight  more  than  doubled.  Sheep  and 
hogs  are  improved  no  less  than  oxen. 

The  wholesale  prices  of  meat  and  other  animal  pro- 
ducts give  a  better  illustration  of  the  changes  in  prices 
in  the  two  centuries  now  elapsed. 

The  prices  paid  at  Greenwich  Hospital  are  quoted  by 
the  cwt.  Thorold  Rogers'  prices  from  King's  College, 
Cambridge,  are  by  the  stone  of  14  Ibs.  The  prices  of  the 
quotations  of  the  Economist,  and  of  the  Statistical 
Society  Journal  by  the  tod  of  28  Ibs.  I  shall,  therefore, 


i62  MONEY  AND  PRICES. 

for  the  accommodation  of  the  reader,  reduce  all  prices  to 
the  pound  weight. 


PRICES    OF   BEEF    FROM    THE    END    OF    THE   SIXTEENTH 
CENTURY   TO  THE  PRESENT  TIME. 

(In  Pence  and  Decimals.) 


1593-1632 

2.2S</. 

1633-42 

2.53* 

1642-1702 
2.97^. 

1693-1702 

1740-70 

3.d. 

1770-90 

3-7  id. 

1800 

1800-20 
7.73d. 

1830 

1840-50 

1860 
7.Sd. 

1865 
f>.l$d. 

1856-65 
t>d. 

1865-70 
6.63^ 

1871-78 

1879-85 

1887 
5.5* 

1888-89 

1891 

1892-93 

1894 

The  rise  is  not  very  marked  in  the  seventeenth  century 
after  the  rise  in  the  first  three  decades  commented  on 
before.  The  rise  in  the  second  part  of  the  century  is  due 
to  causes  explained  already.  In  view  of  the  high  prices 
of  corn  and  the  growth  of  trade  and  population,  the  price 
of  meat  remains  rather  low.  It  does  not  rise  during 
the  first  two  thirds  of  the  eighteenth  century,  though  by 
1770  the  population  had  increased  at  least  by  50  per  cent, 
since  the  death  of  Elizabeth.  The  improvements  in  agri- 
culture must  therefore  have  kept  at  an  even  pace  with  the 
rapidly  extending  town  population  and  the  development 
of  manufacturing  industries. 

That  live  stock  was  considerably  dearer  than  in  propor- 

*  Quotations  by  Th.  Rogers. 

f  From  Greenwich  Hospital. 

J  From  the  Journal  of  the  Statistical  Society. 

S  From  the  Economist. 


PRICES  AND  ECONOMIC  DEVELOPMENT.          163 

tion  to  the  rise  in  the  price  of  beef,  mutton,  and  pork  is 
corroborating  evidence  of  the  well  established  fact  of  the 
improved  breed  of  farm  animals  and  the  heavier  weight 
of  the  carcasses. 

The  rise  in  the  earlier  part  of  this  century,  the  war 
period,  need  not  be  dwelt  upon.  The  known  historical 
facts  are  sufficient  explanation.  We  see  cheaper  prices  in 
the  thirties.  But  from  about  1840  a  rise  in  meat  prices  is 
noticeable  which  cannot  be  attributed  to  any  other  cause 
than  the  difficulty  of  supplying  the  increasing  demand  of 
population.  The  industrial  state  was  rapidly  stepping 
into  the  place  of  the  feudal,  agricultural  state,  obstinately 
defending  its  prerogatives,  but  fighting  its  battle  for  ex- 
istence on  grounds  becoming  rapidly  untenable.* 

Even  the  great  supplies  thrown  into  England  from  the 
western  hemisphere,  and  the  antipodes  do  not  change 
much  in  this.  The  English  navvy  and  collier  as  well  as 
the  factory  hand,  and  the  high  and  well-born  county 
people,  disdain  the  meats  of  animals  that  are  not  killed  in 
the  British  Isles. 

The  price  facts  noted  above  in  reference  to  beef  apply 
fully  to  mutton,  pork,  and  all  hog  produce.  They  apply 
equally  to  butter,  cheese,  and  eggs.  For  these  latter  I 
will  also  give  the  quotations,  taken  from  the  same 
sources. 

*  By  fighting  for  the  preservation  of  their  privileges  the  landed  pro- 
prietors in  the  nineteenth  century  prevented,  or  sought  to  prevent,  the 
growth  of  the  industrial  greatness  of  their  respective  countries,  which  gave 
a  value  to  their  land  and  its  products  far  in  excess  of  anything  previously 
known.  The  high  prices  of  animal  products  maintain  themselves  even  in 
times  when  all  other  values  fade  away  under  the  increasing  supplies  brought 
forth  from  the  development  which  science  gave  to  agriculture  and  trans- 
portation in  the  second  half  of  the  nineteenth  century. 


164 


MONEY  AND   PRICES. 


PRICES  OF  BUTTER  AND  CHEESE  FROM  THE  BEGINNING 

OF  THE  SEVENTEENTH  CENTURY  TO 

THE  PRESENT  TIME. 


(Per  Pound  Weight  in  Pence  and  Decimals.} 


Butter :  * 


Cheese : 


1603-52 
5.  lod. 

1653-1702 

1693-1702 

6.85^. 

1740-70 

5-33^- 

1770-90 

1800    1800-20 
i  r  .  33^.    1  1  .  sod. 

1830 
6  .  5  od. 

1840-50 
10.65^. 

1860 

12d. 

1865 

1849-52 
g.26d. 

1853-57 
1  1  .  id. 

1858-66     1867-70 

1871-77 
13.  td. 

1878-85 

12.  (>d. 

1886 
10.  id. 

1888-89 
1  1  .  46^. 

1892-93 

1  1  .  Sd. 

1894 
1  1.  lid. 

1603-52 
3-5<£ 

1653-1702 
3  .  62d. 

1693-1702 

1740-70 

3-25^. 
1830 
4d. 

1770-90 
3.  Sod. 
1840-50 
4-75^- 

1800     1800-20 
6.2$d.    "7  -33d. 
1850      1860 

1865 

1873 
gd. 

1882 

1888-89 
8.35^- 

1892-93 
8.56^. 

1894 

The  fact  that  meats  of  all  kinds,  butter,  cheese,  and  even 
eggs  follow  alike  in  the  same  mutation  of  prices  during 
the  eighteenth  and  nineteenth  centuries,  is  proof  that  the 
causes,  which  operated,  were  the  same.  It  could  not 
have  been  any  change  in  the  monetary  situation  that 
brought  prices  in  the  period  of  1820  to  1840  from  the 
high  range  they  held  from  the  outbreak  of  the  French 
wars  to  about  1820,  back,  approximately,  to  those  ruling 
in  the  twenty  years  prior  to  the  wars.  Nor  can  the  rise 
in  the  forties  and  the  fifties  be  ascribed  to  any  such  cause, 
as  the  discoveries  of  the  gold  fields  could  not  immedi- 
ately become  effective  in  fulfilling  the  mission  ascribed  to 

*  Quotations  by  Th.  Rogers.  f  From  Gree'nwich  Hospital. 

\  From  the  Journal  of  the  Statistical  Society.          §  From  the  Economist. 


MODERN  PRICES  OF  WOOL.  165 

them.  The  prices  from  the  fifties  on  show  a  remarkable 
steadiness.  They  remain  undisturbed  on  the  high  level 
they  had  then  attained,  all  through  the  changing  periods 
of  rise  and  fall  of  which  the  last  half  century  has  been  so 
prolific.  Neither  the  appreciation  of  silver,  nor  the  depre- 
ciation of  gold  in  the  sixties,  nor  the  depreciation  of  sil- 
ver and  "  appreciation  of  gold  "  at  the  present  time,  has 
affected  them.  A  sufficiency  of  evidence  that  the  cause 
can  be  no  other  than  the  general  demand,  keeping  abreast 
with,  if  not  being  somewhat  ahead  of,  the  supply  in  the 
new  England  succeeding  the  enactment  of  the  reform 
bill  and  the  abolition  of  the  corn-laws. 

The  Prices  of  Wool. 

If  we  examine  the  price  of  wool  we  find  the  condition 
the  same  as  in  the  preceding  century.  English  wool 
does  not  rise. 

Arthur  Young  gives  the  price  of  English  wool  for  1765 
as  1 1 s.  ^d.  per  stone,  which  is  9^.  the  pound  ;  for  1776 
as  los.  od.  per  stone,  which  is  8^/.  the  pound.  It  remains 
at  nearly  this  range  up  to  the  time  of  the  wars  with  France. 
A  singular  uniformity  of  price  during  two  centuries 
characterized  by  unexampled  changes  in  the  political  and 
economic  fortunes  of  the  nation.  The  price  of  English 
wool  becomes  very  high  in  the  period  1850-60  =  2\d.  the 
pound,  and  from  then  on  gradually  declines  again  till  it 
makes  its  present,  lowest  level.  The  price  is  1846-52  = 
I2d. ;  1853-57  =  l6^- 1  1858-66  =  2\\d.  ;  1867-70  =  i8</. ; 
1871-77  —  2od. ;  1878-88  =  \2\d. ;  1892  =  yd. ;  1893  = 
10^.;  1895  =9f</. 

Wool,  accordingly,  is  cheaper  to-day  in  the  actual 
money  of  our  time,  than  it  was  300  years  ago,  long  before 
any  emergency  arose  by  which  a  rise  in  price  could  possi- 
bly be  attributed  to  an  increasing  supply  of  silver  or  money 


1 66 


MONEY  AND  PRICES. 


circulation.  Wool  of  the  present  breeds  is  undoubtedly 
much  superior  in  quality  to  the  growth  of  that  time. 

Fine  wools,  imported  from  abroad,  Spanish,  so-called 
Leonesa  wool,  was  very  high  in  the  last  and  up  to  the 
middle  of  the  present  century.  The  decline  in  these  is 
really  phenomenal. 

Arthur   Young   says   in    a   pamphlet   to    Parliament : 

The  Question  of  Wool  Truly  Stated:  "  The  pound  of  wool  completely 
dressed  and  spun  costs  in  Languedoc  about  3  Ivs.  5  sous  per  pound,  the 
small  pound  of  12  ozs."  [This  equals  85  cents  (42^.),  our  pound  of  16 
ozs.]  "  The  wool  of  Segovia  costs  5  Ivs.  6  sous  the  pound  of  18  ozs.  half 
washed"  (=92  cents  or  46^.  the  16  ozs.).  "Wool  in  general,  washed, 
costs  in  France  £2  2s.  $d.  the  tod  of  28  pounds  (  =  iSd.  or  36  cents  the 
pound);  unwashed,  i6j.  lid.  (j\d.  or  14^  cents  the  pound)  ;  equal,  when 
washed,  £2  los.  gd.  (2i$d.  or43^  cents  the  pound.)." 

This  must  be  a  wool  of  great  shrinkage  as  it  takes 
3  pounds  of  greasy  wool  to  make  up  the  price  of  scoured, 
according  to  the  statement.  The  Spanish  wool  is  the 
wool  from  which  our  own  merino  and  the  fine  wools  of 
Saxony  and,  now,  the  South  American  and  Australian  fine 
wools  take  their  origin. 

The  prices  quoted  by  Tooke  from  1782  to  1838  for  fine 
Spanish  Leonesa  wool  are  as  follows  : 

Average  price  for  ten-year  periods  : 

1782-91      Leonesa  wool  3-r.  3f</.  to  3.?.  gd.  per  pound. 


1792-1801 

4S.  $d. 

4*.  Id. 

1  802-1  8  n* 

6s.  od. 

6s.  gd. 

1812-1815 

7.?.  6d. 

gs.  od. 

1816-1819 

6s.  od. 

JS.  od. 

1820-1825! 

3-r.  $d. 

4*.  Id. 

1826-1831 

23.  4d. 

3s.  4d. 

1832-1838 

2s.  6d. 

$s.  id. 

Here,  beginning    with  1825,  we   have  reached  a  con- 
siderably lower  level  than  existed  in  the  equally  normal 

*  I  do  not  include  in  this  statement  the  years  1809  and  1810.  The  prices 
were  abnormally  high,  ranging  from  12s.  to  22s.  the  pound.  The  prices  for 
the  other  years  do  not  vary  much  from  the  average  of  the  decade. 

\  A  duty  of  6d.  a  pound  and  from  1825  a  duty  of  id.  the  pound. 


MODERN  PRICES  OF  WOOL. 


I67 


and  peaceful  decade  before  the  outbreak  of  the  French 
Revolution. 

If  we  continue  our  price  comparison  to  the  present 
time,  we  have  to  take  Port  Philip  merino  fleece  which 
takes  the  place  of  the  fine  fleeces  from  Spain : 


1846-55  Port  Philip  merino  average  fleece,  is.    b\d.  per  pound. 

1856-67  "  -  "^ 

1868-71 

1872-75 
1876-84 
1885-90  " 


is.  lid. 
is.    Id. 
2s.    od. 
is.    8^ 
is.    4</. 


In  the  greasy  wools,  Adelaide,  River  Plate,  Cape,  and 
similar  grades,  the  rise  and  fall  has  been  in  the  same  pro- 
portion as  in  the  Port  Philip  prices.  The  price  of  Ade- 
laide greasy  wool  averaged  "j\d.  in  1848-52,  was  worth 
the  same — J^d. — in  1893  and  1894,  and  is  now  quoted 
(March  i,  1895)  at  6^  to  6^d.  the  pound.  Low  as  pres- 
ent wool  prices  are,  the  price  is  not  materially  different 
from  that  of  the  years  1848-52,  which  were  also  years  of 
price  depression.* 

*  Wool  prices  rise  and  fall  according  to  supply  and  demand.  Certain 
kinds  coming  into  more  active  demand  than  previously  obtained  for  them, 
gives  them  for  a  time  a  higher  proportionate  value  than  is  in  strict  accord- 
ance with  the  general  drift  of  prices.  On  the  whole,  the  downward  tend- 
ency of  prices  is  explained  by  the  steadily  increasing  supplies  from  the 
southern  hemisphere. 

Thus  commencing  with  1860  we  find  the  five-yearly  average  of  shipments 
to  Europe  and  North  America  to  have  been  as  follows  (in  thousands  of 

bales) : 

Australasia.        Cape.        River  Plate.         Totals. 

1860 186  61  40  293 

1860-64 234  7°  67  371 

1865-69 417  126  194  727 

1870-74 568  154  300  1,022 

1875-79 79°  »8i  273  1,244 

1880-84 997  203  326  1,525 

1885-89 1,239  252  384  i,  "75 

1890-94 1,676  300  382  2,358 

1894 ',896  256  443  2,595 

A  seven-fojd  increase  of  supply  taking  place  in  the  thirty  years  beginning 


1 68 


MONEY  AND  PRICES, 


Changes  in  the  Price  of  Metals,  etc. 

When  we  turn  to  iron,  lead,  and  copper  we  find  even  a 
more  marked  tendency  to  lower  prices  for  reasons  readily 
comprehended.  Of  course,  it  will  be  understood  that 
years  of  war  always  bring  their  impress  on  metals,  and  I 
shall  confine  myself  to  marking  these  periods  by  asterisks. 

PRICES  OF  IRON  AND  OTHER  METALS  IN  THE  DIFFERENT 

PERIODS  FROM  THE  CLOSE  OF  THE  SEVENTEENTH 

CENTURY  TO  THE  PRESENT  TIME. 

(In  English  shillings  per  ton.) 


1693 
to 
1702 

1784 
to 
1790. 

* 
1791 
to 

1803. 

* 

1804 
to 
1819. 

1821 

to 

1838. 

l848 

to 

1852. 

* 

1853 
to 

1857 

1858 
to 

1871. 

* 
1872 
to 

1874. 

!878 
to 
1886. 

1887 
to 
1889. 

1893 
to 

1894 

English      pig 

iron,  per  ton. 

240 

70 

103 

140 

114 

41 

70 

53 

IO2 

49 

41 

42 

to 

to 

to 

to 

1  20 

157 

1  80 

1  2O 

Finished  iron 

(in      bond), 

per  ton.  .  .  . 

268 

364 

298 

308 

119 

179 

127 

22O 

I2O 

105 

IOO 

to 

to 

380 

380 

Copper,      per 

cwt  

QQ 

80 

en 

IAT 

QI 

87 

122 

QQ 

92 

67 

QO 

42 

W 

VJ 

^•J 

J 

v  / 

w 

/ 

7 

to 

*74 

t45 

t39 

Lead,  per  fod- 

der     (19^ 

cwt.,  about 

2200  Ibs.).. 

169 

382 

441 

623 

4O6 

34^ 

472 

405 

430 

292 

260 

1  80 

with  1865  and  a  doubling  in  fifteen  years  of  the  large  product  of  1879,  was 
bound  to  leave  its  imprint  upon  prices. 

The  average  price  of  all  the  colonial  wools  imported  into  Europe  and 
America  is  given  per  bale  in  the  circular  of  Helmuth  Schwartze  &  Co.  for 
each  year  from  1860.  The  quinquennial  average  price,  beginning  with  1871, 
is  for 

1871-1875  .............................  .£23  isj.  od. 

1876-1880  .............................  ^18  I2J-.  oa. 


1881-1885  .............................    ;£i6 

1886-1890  .............................    £14 

1890-1894 
1894 
*  Average  of  1867  to  1871. 


6s.  od. 
6s.  ^d. 
7-r.  bd. 
.£11   ioj.  od. 
f  Average  of  1885  to  1886. 


|  Copper  corner  in  1888  and  collapse  early  in  1889, 


OLD  AND  NEW  PRICES  OF    TEXTILES.  l6g 

I  have  only  given  the  raw  materials.  The  decline  in 
price  in  manufactured  articles  is  so  great  that  a  compari- 
son of  prices  of  two  hundred,  one  hundred,  or  even  fifty 
years  ago  with  present  prices  would  be  most  astounding 
if  it  could  be  readily  put  into  figures. 

Nails  may  serve  as  an  example.  Worth  about  5  pence 
the  pound,  bought  at  the  smithy,  two  hundred  years  ago, 
they  are  sold  in  America  now  at  not  much  over  the  tenth 
part  of  that  price  at  wholesale,  and  even  after  the  late 
rise  they  are  still  but  one  sixth  of  that  price. 

I  have  shown  that  the  price  of  English  wools  to-day  is 
not  materially  lower  than  it  was  two  hundred  years  or 
one  hundred  years  ago.  The  price  of  woollen  cloth 
wrought  out  of  this  wool,  however,  is  barely  one  third  of 
the  price  at  which  we  left  it  in  our  price  quotations  at  the 
end  of  the  seventeenth  century. 

Eton  College  pays  250^.  as  the  average  price  for  the 
piece  of  thirty-three  yards  of  better  grade  cloth  served 
out  by  the  college  in  the  seventeenth  century,  which  is 
equal  to  js.  6d.  the  yard.  St.  John's  livery  cloth  is 
marked  down  at  different  periods  of  the  century  at  1445". 
the  dozen  yards,  i.e.  12s.  the  yard.  The  best  cloth  is  37^. 
6d.  the  yard  in  1633  to  1642,  and  igs.  in  about  1697. 
These  are  undoubtedly  of  imported  varieties. 

At  this  present  time  an  English  worsted  cloth  56  inches 
wide  and  weighing  16  ounces  is  sold  to  the  trade  at  2s.  6d. 
a  yard.  This  cloth  is  made  of  much  finer  wool  than  the 
cheaper  quality  mentioned  above  could  possibly  have 
been  made  of,  as  the  present  worsteds  are  made  of  fine 
merino  wools,  which  cost  in  former  times  greatly  more 
than  English  wools,  as  we  have  seen  above. 

In  linen  shirtings,  table-cloths,  napkins,  etc.,  the  same 
price  decline  has  come  about,  though  flax  has  not  changed 
very  materially  from  the  price  of  the  latter  part  of  the 


i  ;o 


MONEY  AND   PRICES. 


seventeenth  century,  until  about  ten  years  ago.  It  is 
quoted  at  48^.  the  cwt.  in  1695,  and  at  a  somewhat  earlier 
period  at  $6s.  The  price  from  1782  to  1885,  excepting  the 
French  war  period,  has  varied  between  36^.  to  $2s.  the 
hundredweight. 

The  great  differences  in  the  price  of  the  manufactured 
product  are  all  in  the  parts  that  are  added  to  the  value 
by  the  art  of  the  manufacturer. 

The  chief  evidence,  however,  of  the  indifference  of 
prices  to  an  increasing  supply  of  money  in  circulation,  is 
again  adducible  from  prices  of  foreign,  /.  e.  colonial,  pro- 
ducts. 

We  have  noticed  their  steady  decline  in  the  two  cen- 
turies previously  examined.  They  have  come  to  an  ex- 
treme of  price  so  low  as  to  be  almost  astonishing  if 
measured  by  the  quotations  of  those  remote  days. 

PRICES  OF  COLONIAL  PRODUCTS  IN  THE  EIGHTEENTH 
AND  NINETEENTH  CENTURIES,  COMPARED 
WITH  THE  PRICES  OF  THE  SEVEN- 
TEENTH CENTURY. 


1693 
to 

1784 

1791 

1804 

1821 

1848 

'853 

1858 

1872 

1878 

1887 

1893 

1701. 

1790. 

1803. 

1819. 

1838. 

1852. 

1857- 

1871. 

1877. 

1883. 

1889. 

1894. 

Sugar,  white, 

cwt  

121 

60 

62 

-1C 

244 

lof- 

2oi- 

28 

2« 

16 

I4i 

to 

to 

JJ 

to 

*  T» 

J"T 

^v:? 

*  j 

*^S 

77 

65 

41 

Cinnamon, 

per  Ib  

6* 

«i 

7^ 

8** 

7^ 

1\d. 

7f* 

Pepper,     per 

Ib  

i?i/. 

i6</. 

i6</. 

nd. 

4f* 

yt. 

tf. 

*£ 

5K 

6V. 

l\d. 

z¥- 

Rice,  per  cwt. 

36-Jj. 

19*. 

24s. 

35s. 

33s. 

I4|*. 

I  It. 

10^. 

9U 

8fc. 

7U 

8i,. 

*  The  price  of  cinnamon  averages  only  4J.  f>d.  in  the  ten  years  for  1799  to 
1808,  and  rises  then  very  rapidly  to  7^.  and  8.T.,  and  reaches  in  1814  as  high 
as  i$j.  the  pound, 


CHANGES  IN  SOUTHERN  PRODUCE.  I /I 

The  price  decline  is  quite  natural,  and  easy  of  under- 
standing, when  we  take  into  consideration  the  great 
economies  which  have  become  practicable  through  the 
achievements  in  commerce,  trade,  and  manufactures.  Of 
these  and  their  resulting  effects  upon  prices  I  shall  speak 
in  another  place.  The  object  of  showing  the  inadequacy 
of  the  money-quantity  theory  is  attained  by  showing  that 
commodities  only  supplied  through  commerce  from 
abroad,  and  wherein  a  change  in  the  relations  of  money 
to  merchandise  would  soonest  show  results  in  keeping 
with  the  ruling  views  on  the  subject,  show  the  very 
opposite. 

Prices  of  these  commodities  are  lower  in  the  sixteenth 
than  in  the  fifteenth  century.  They  are  lower  in  the  sev- 
enteenth than  in  the  sixteenth  ;  lower  in  the  eighteenth 
than  in  the  seventeenth ;  and  in  the  nineteenth  century, 
barring  years  of  war  and  speculative  expansion,  the  con- 
sequence of  wars  and  their  effects,  have  made  price  records, 
which  are,  if  not  lower  in  the  eighties  than  in  the  forties, 
certainly  as  low  as  before  the  great  additions  to  the  money 
supplies  were  made  by  the  new  discoveries. 

Of  all  the  tropical  products,  coffee  alone  is  higher  than 
it  was  in  the  ten  or  twenty  years  prior  to  the  years  when 
the  effect  of  the  American  and  Australian  gold  discoveries 
is  said  to  have  become  apparent  on  prices.  This  is  a  clear 
proof  that  prices  are  regulated  by  causes  inherent  in  the 
commodity.  The  greater  demand  on  an  article  that  has 
become  an  almost  indispensable  necessity  with  the  work- 
ing classes  in  three  great  industrial  states,  America,  Ger- 
many, and  France,  is  explanation  sufficient.  In  England, 
tea  supplies  this  place.  The  price  is  on  the  same  low  level 
as  in  the  years  1845-52.  The  expansion  of  cultivation  in 
Ceylon  and  British  India  has  added  so  rapidly  supplies  to 


1^2  MONEY  AND  PRICES. 

the  consumer's  increasing  demands  that  the  effect  is  as 
shown  in  the  figures  of  my  table  appended  below. 

PRICES  OF  FOREIGN  PRODUCE  FROM  THE  LATTER   PART 

OF  THE  EIGHTEENTH  CENTURY  TO  THE 

PRESENT  TIME. 


1782 

1791 

1804 

1821 

1848 

1853 

1858 

1862 

1871 

1878 

1887 

l8Q2 

1790. 

1803. 

1819. 

1838. 

1852. 

1857- 

1861. 

1870. 

1877. 

1883. 

1889. 

1894. 

* 

Coffee,      East 
India,  (Cey- 
lon       from 
1848),     per 
cwt  

Ro 

112 

106 

So 

ei 

58 

67 

74 

07 

R3 

86 

1  02 

Cotton,  Amer- 
ican, per  pd. 

d. 

'7i 
to 

28 

d. 

16 
to 

28 

d. 

14 
to 
i6t 

d. 

7i 

to 

8 

d. 

5f 

d. 
6A 

d. 
7 

</. 
i6i 

</. 
8 

</. 
6| 

d. 

mt 
ST 
to 
6| 

dT. 
4* 

Cochineal, 
per  pd  
Indigo.  per  pd. 
Saltpetre,  East 
India  (Chili 
from  1848), 
per  cwt  .... 
Silk,       China 
Tsatlee,  per 
pd  . 

I5i 

5i 

53 
24i 

195 
?| 

76 

2Or 

28 
9 

63 
27i 

*1\ 
7 

26 

T7» 

4f 
4* 

13 
ill 

4 
5i 

18 

Tol 

31 
6| 

I3i 

21 

3^ 
7f 

14 

2J 

4 
6| 

I3t 

21» 

if 
6f 

13 
16 

»| 

3| 

i7i 

1*1 

IT'; 
3T7i 

i7i 

14 

(f 

d 

d 

d 

ff 

r^ 

rf 

r/ 

r/ 

rt' 

r/ 

d. 

Tea,  Congou, 
good     aver- 
age, per  pd. 

46 

41 

38 

39 

'3* 

15 

I7i 

I8t 

I6i 

I3t 

I3i 

12 

In  this  table  the  prices  of  leading  products  of  southern 
climates  are  given,  the  importation  of  which  into  European 
markets,  upon  a  large  scale,  are  of  more  recent  dates. 


*  Cochineal  price  quoted  in  this  column  is  for  1829  to  1838. 


AGREEMENT  IN  PRICE  HISTORIES.  173 

Comparisons  with  mediaeval  prices  are  therefore  excluded. 
They  begin  with  the  year  1782  with  the  price  quotations 
from  Tooke  and  Newmarch  to  1838.  From  that  time  on 
the  official  publications  of  the  Board  of  Trade,  etc.,  supply 
the  data. 

The  price  record  of  products  which  lead  in  a  continuous 
line  from  the  beginning  of  England's  commercial  history 
to  the  present  day,  is  complete  enough  "a  demonstration 
of  our  claim  in  itself.  But  it  will  find  further  support  in 
the  next  chapter  from  the  price  history  of  France  and 
Germany. 


CHAPTER  IX. 

Corroboration  of  the  Price  History  of  England  in  the  Price  History  of 
France  and  of  Germany. — The  History  of  French  Prices  Beginning 
with  the  Year  1201  A.  D. 

A  WORK  of  great  value  for  our  purpose  has  just  made 
its  appearance.  Honored  with  the  "  Prix  Rossi  "  by  the 
"Academic  des  Sciences  Morales  et  Politiques  "  in  1890 
and  1892,  and  published  under  the  auspices  of  the 
government,  it  comes  to  us  with  a  guaranty  of  the 
authenticity  of  its  contents.  The  work  is  an  economic 
history  of  property,  wages,  incomes,  and  prices  from  the 
year  1200  to  the  year  1800.*  Mr.  Emil  Levasseur,  in  a 
monograph  introductory  to  Mr.  d'  Avenel's  work,  gives 
additional  data  down  to  1891  by  adding  valuable  tables 
from  a  corresponding  publication  by  Mr.  Zolla. 

We  have  therefore  now  a  continuous  price  record  of 
France  alongside  of  the  price  history  of  England. 

The  price  record  is  not  as  complete  as  that  furnished  to 
us  by  Thorold  Rogers.  The  prices  of  grain  furnish  the 
chief  part  of  the  price  history.  Mr.  Zolla's  additional 
tables  for  a  few  other  articles,  however,  are  very  im- 
portant corroborations  of  the  intrinsic  price  theory. 

*  Histoire  Economique  de  la  Propriete,  des  Salaires,  des  Denrees  et  de 
Tous  les  Prix  en  General,  depuis  1'  An  1200  jusqu  'en  1'  An  1800  ;  par  le 
Vicomte  G.d'Avenel. 

174 


THE    WORK  Of  MR.   PAVEtfEL.  t;$ 

What  is  of  greatest  value,  and  has  not  found  exposition 
before,  is  Mr.  d'Avenel's  history  of  prices  of  real  property 
for  the  same  long  period.  The  character  of  the  work 
produced  by  Mr.  d'Avenel  is  hardly  understood  by  an 
English  reader,  who  has  never  had  to  deal  with  anything 
but  his  pounds,  shillings,  and  pence.  In  the  middle  ages, 
France  was  not  differently  situated  than  Germany  in 
regard  to  moneys,  as  already  stated.  The  difficult 
character  of  the  question  as  well  as  the  nature  of  money 
dealings  in  the  past  is  best  illustrated  in  a  few  words 
taken  from  Mr.  d'Avenel  himself : 

"  An  endless  number  of  disks  of  gold,  silver,  and  billon  were  coined  by 
all  sorts  of  people  in  all  kinds  of  countries,  and  these  the  people  had  to  value 
in  livres,  sous,  and  deniers  at  their  true  valuation,  by  weight  and  fineness. 
The  barons  and  prelates  who  coined  money  regularly  in  the  thirteenth 
century  numbered  eighty.  There  were  consequently  eighty  coining  stand- 
ards but  in  reality  there  were  a  good  many  more.  Besides  this  there  were 
quite  a  number  of  pieces  circulating  of  much  more  ancient  date.  In  1420, 
at  Limoges,  pieces  coined  in  817  with  the  effigy  of  Louis  le  De'bonnaire 
were  still  common.  At  the  same  time  coins  are  met  with  the  names  of 
Charlemagne,  Eudes,  Pepin  of  Aquitaine,  i.  e.  dating  from  752  to  890." 

All  these  moneys  of  different  weights,  fineness,  and 
denominations  had  to  be  reduced  to  the  money  of  account, 
as  then  existing,  the  "  livre  tournois,"  though  this  was  by 
no  means  the  only  livre  or  money  of  account.*  The  "  livre 
tournois"  at  first  was  not  coined.  It  only  represented  a 
certain  quantity  of  silver,  about  98  grammes,  a  statement 
being  given  that  the  marc  (245  grammes)  was  worth  2 
livres  10  sous.  This  same  "livre  tournois"  in  the  later 
coins  came  gradually  to  the  low  standard  of  about  a 
twentieth  part  of  the  livre  of  the  time  of  Philip  Augustus. 

*  The  principal  ones  met  with  are  the  livre parisis  and  in  the  South  the 
livre  raymondine  (Toulouse)  all  of  different  values. 


176  MoxbY  AND 

It  is  evident  from  this  that  no  money  payments  were 
possible,  nor  are  quotations  of  prices  at  all  intelligible,  on 
any  other  basis  than  that  of  weight.  Easy  as  it  may 
have  been  for  those  born  and  bred  to  the  process  of 
computing  all  sorts  and  kinds  of  moneys  into  the  money 
of  account,  to  the  compilers  of  a  price  history  writing  near 
the  end  of  the  nineteenth  century,  the  work  is  of  almost 
forbidding  severity,  though  he  is  aided  considerably  by 
the  fact  that  payments  were  adjusted  by  weight  of  silver.* 

*  The  investigator  finds  his  labor  considerably  lightened,  as  most  of  the 
ancient  amounts  are  given  in  the  money  "  forte,"  or  the  money  of  account, 
i.  e.  by  weight  of  silver.  Mr.  d'Avenel  says  on  this  subject  on  page  53, 
vol.  i : 

"  The  monetary  changes  did  not  have  the  consequences  which  one  might 
suppose  at  first  sight  and  which  a  majority  of  historians  attribute  to  them. 
This  is  a  strange  fact,  but  the  study  of  prices  of  commodities  proves  it 
abundantly.  The  current  value  of  money  does  not  obey  the  ordinances  of 
kings.  I  was  myself  very  much  surprised,  I  admit,  to  find  almost  no  trace 
of  the  troubles  one  might  suppose  to  have  been  caused  by  this  action  of 
prices  in  regard  to  money.  The  transactions  between  private  parties  do  not 
seem  to  have  suffered  seriously.  One  stipulates  to  pay  in  such  and  such 
species  not  changed,  or  in  '  monnaie  forte  ; '  but  the  prices  of  all  things,  ex- 
pressed in  livi  es  and  sous,  remain  the  same  in  the  years  in  which  the  marc 
of  silver  suffers,  by  royal  will,  an  artificial  rise  over  the  years  that  precede 
or  follow. 

"  This  is  the  case  in  1305  when  the  marc  passes  quickly  from  3  livres  13 
sols  to  9  livres  ;  in  1355,  when  it  jumps  from  6  livres  15  sols  to  18  livres  ;  in 
1360,  when  it  rises  to  24  livres,  53  livres,  and  to  102  livres  ;  in  1420,  when 
from  7  livres  5  sols  it  is  raised  to  26  livres.  Under  Philip  le  Bel,  the  greater 
part  of  sales  of  rentes  and  realty  are  by  contract  stipulated  to  be  paid  in 
good  and  full  money,  of  the  weight  and  value  of  St.  Louis.  Public  opinion 
persists  in  treating  money  as  a  merchandise,  and  if  the  government  has 
issued  money  that  is  weakened  in  tale  or  weight,  the  people  do  not  accept  it 
except  for  its  intrinsic  value,  to  which  they  reduce  it  in  their  speech  as  well 
as  in  documents. 

"Weighing  the  coins  or  valuing  them  in  florins,  in  ecus,  in  this  or  that 
standard  which  has  remained  intact,  are  the  means  usually  employed  in  the 
markets  to  escape  being  cheated." 


ERRONEOUS  MONETARY  VIEWS.  Iff 

Hence  price  quotations  do  not  vary  with  the  spasmodic 
and  violent  changes  in  the  currency. 

Mr.  d'Avenel  has  computed  all  prices  of  the  periods 
traversed,  into  the  franc,  i.  e.  4.50  grammes  of  silver,  and 
the  measures  and  weights,  not  much  less  bewildering  than 
the  money  varieties,  into  kilogrammes  and  hectolitres. 
If  we  bear  in  mind  that  the  kilogramme  is  2\  Ibs.,  the 
hectolitre  2f  bushels,  and  the  franc  19.3  cents,  it  is  not 
difficult  to  compare  the  prices  with  English  and  American 
quotations  already  stated. 

Mr.  d'Avenel  is  of  opinion  that  the  increased  money 
supplies  coming  from  the  American  mines  in  the  sixteenth 
century  caused  the  rise  in  prices  in  the  second  half  of  it. 
He  adduces  causes  of  very  great  moment  in  the  history 
of  France,  which  are  in  themselves  sufficient  to  explain 
the  phenomena  of  the  price  variations.  But  he  gives  no 
satisfactory  proofs  that  the  money  increase  causes  the 
change.  In  French  prices  we  also  find  only  grains  affected 
in  that  way,  while  other  commodities  show  no  changes  or 
declines.  We  cannot  ascribe  these  views  to  any  other 
cause  than  that  fixity  of  opinion  which  engrafts  itself 
upon  the  mind  by  a  tradition  of  authorities  coming  down 
from  father  to  son,  and  not  questioned  because  of  their 
venerable  age. 

But  I  will  let  the  facts  speak  as  brought  out  by  Mr. 
d'Avenel,  supplemented  by  Mr.  Zolla,  the  latter's  state- 
ments from  the  brochure  of  Mr.  Levasseur. 

I  will  first  give  the  very  interesting  review  of  the 
value  of  agricultural  land,  and  the  income  from  land  for 
the  three  old  provinces  of  lie  de  France,  Normandie, 
and  Champagne  ;  the  general  average  for  France,  and 
of  meadow  land  and  vineyards  with  the  returns  from 
all  of  them. 


MONEY  AND  P&ICES. 


I.— AVERAGE  PRICE  PER  HECTARE  (2.47  STATUTE  ACRES) 
OF  AGRICULTURAL  LAND,  MEADOW  LAND  AND  VINE- 
YARDS, AND  OF  RETURNS  FOR  LAND  (IN  FRANCS). 


ILE  DE 

NOR- 

CHAM- 

AVERAGE 

MEADOW 

VINE- 

FRANCE. 

MANDIE. 

PAGNE. 

FOR 

FRANCE. 

LAND. 

YARDS. 

PERIOD. 

V 

V 

u- 

u 

• 

u 

«J 

3 
C 

I 

3 

d 

u 

.H 

3 
V 

V 

3 
1 

V 

3 

1 

1 

3 
C 

fi 

u 

fi 

E 

£ 

V 

PH 

U 

PH 

6 

PL, 

u 

M 

(* 

(4 

ft 

« 

K 

1200-1225.  . 

igO 

19 

I3O 

13 

98 

IO 

135 

13.50 

428 

42 

387 

38 

1226-1250.  . 

288 

28 

236 

13 

464 

46 

232  23.5O 

354 

35 

600 

60 

1251-1275.  . 

250 

25 

2O4 

20 

3'7 

31 

2O6  2O.6O 

790 

79 

340 

34 

1276-1300.  . 

360 

36 

29O 

29 

263 

26 

26l 

26 

3/6 

37 

721 

72 

1301-1325.. 

243 

24 

364 

36 

226 

23 

222 

22 

616 

61 

636 

63 

1326-1350.. 

157 

15 

128 

12 

82 

8 

1  08 

10.8 

235 

23 

463 

46 

i35i-'375- 

69 

6 

1  80 

18 

53 

5 

83 

8-3 

337 

33 

140 

14 

1376-1400.. 

116 

II 

no 

n 

62 

6 

98 

9.8 

484 

48 

420 

42 

1401-1425.  . 

"5 

n 

86 

8 

78 

7 

89 

8.9 

136 

13 

376 

37 

1426-1450.  . 

45 

4 

23 

2 

75 

7 

68 

6.8 

139 

13 

218 

21 

145  I-I475  •• 

54 

5 

53 

5 

22 

2 

48 

4.8 

218 

21 

127 

12 

1476-1500.  . 

136 

ii 

.48 

4 

6? 

5 

97 

8.1 

123 

10 

228 

19 

1501-1525.. 

90 

7 

96 

8 

101 

8 

95 

8 

268 

22 

191 

16 

1526-1550.  . 

244 

20 

109 

9 

78 

6 

132 

n 

237 

19 

378 

31 

I551-I575-  • 

426 

30 

288 

20 

192 

13 

241 

17.2 

524 

37 

705 

50 

1576-1600.  . 

371 

23 

495 

30 

389 

24 

317 

19.8 

448 

38 

5i8 

32 

1601-1625.  . 

400 

2O 

383 

19 

313 

15 

277 

14 

693 

34 

600 

30 

1526-1650  . 

380 

19 

295 

14 

412 

20 

308 

15-4 

6/5 

33 

580 

29 

1651-1675.  . 

537 

21 

520 

20 

500 

2O 

481 

19.2 

970 

48 

860 

43 

1676-1700.  . 

395 

19 

340 

17 

478 

23 

375 

18.7 

910 

45 

750 

37 

1701-1725.  . 

309 

12 

329 

13 

323 

13 

265 

11.4 

670 

27 

575 

23 

1726-1750.  . 

494 

20 

461 

18 

402 

16 

344 

13-7 

885 

35 

1125 

45 

I75I-I775.  • 

630 

22 

600 

21 

585 

20 

545 

18 

IOOO 

35 

1380 

50 

1776-1800.  . 

1092 

38 

853 

30 

784 

27 

764 

26 

1244 

44 

1312 

47 

1800.  .. 

2400 

80 

2628 

87 

"45 

38 

1600 

26 

2600 

86 

2600 

~s 

I  cannot  enter  at  any  length  into  the  question  of  the 
high  prices  for  farm  land,  in  the  century  beginning  with 
1225  A.D.  That  transactions  of  purchase  and  sale  were 
more  limited  than  in  later  periods  may  be  averred  with 
full  justice.  But  still  the  data,  so  far  as  they  go,  cover 


LAND    VALUES,  179 

the  question  fully  as  well,  as  these  are  the  prices  actually 
paid  in  all  the  cases  brought  out  from  the  records  of  those 
hundred  years. 

The  prices  are  extraordinarily  high,  considering  the 
limited  money  supply  of  the  time.  Farm  and  meadow 
land,  roughly  speaking,  rules  nearly  the  same  as  the 
average  of  the  period  from  the  middle  of  the  sixteenth  to 
the  middle  of  the  seventeenth  century. 

The  average  price  for  farm  land  in  1225  to  1325  is  231 
francs;  for  1550  to  1650  it  is  286  francs  the  hectare. 
Meadow  land  is  528  francs  in  the  former  and  585  francs  in 
the  latter  period. 

Vineyards  approximate  even  more  closely.  The  aver- 
age for  1225  to  1325  is  575  francs;  for  1550  to  1650  it  is 
601  francs  the  hectare. 

The  rise  during  the  succeeding  hundred  years  (1651  to 
1750)  is  not  very  formidable  either.  In  the  face  of  the 
general  improvement  in  agriculture  compared  to  preced- 
ing periods  it  cannot  be  called  perceptible  even.  The 
average  price  for  farm  land  is  368  francs,  a  rise  of  60  per 
cent,  over  1225  to  1325,  and  a  rise  of  30  per  cent,  over 
1550  to  1650.  For  meadow  land  the  average  is  859  francs, 
which  is  a  rise  of  60  per  cent,  over  the  first  and  47 
per  cent,  over  the  second  period  named.  Vineyards  are 
827  francs  the  hectare,  and  show  a  rise  of  43  per  cent, 
over  thirteenth-  and  37^  per  cent,  over  sixteenth-  to 
seventeenth-century  prices.  But  even  these  differences 
disappear  when  we  measure  the  prices  of  the  medieval 
period  in  the  silver  ratio  of  the  eighteenth  and  nineteenth 
centuries. 

The  returns  to  the  proprietor  are  decidedly  higher 
than  at  present,  due  to  the  higher  rate  of  interest.  The 
returns  from  land  are  10  per  cent. ;  in  the  later  period 


ISO  MONEY  AND   PRICES. 

beginning  with  1550,  they  are  8  per  cent,  and  then  descend 
to  7  ;  from  /  they  soon  go  to  5  and  4  at  the  beginning  of 
the  eighteenth  century,  while  at  present  they  are  but  little 
over  3  per  cent.  At  the  end  of  the  nineteenth  century, 
with  the  great  rise  in  the  price  of  land  in  France,  the  low 
price  of  money  brings  the  revenue  down  to  a  figure  not 
very  far  from  thirteenth-century  rates.  The  great  im- 
provements in  the  economy  of  agriculture,  yielding  much 
higher  net  results,  must  therefore  give  to  the  cultivator  a 
by  far  greater  return  than  he  ever  had  before. 

A  great  fall  in  landed  estates  and,  of  course,  in  the 
revenue  from  land  sets  in  with  the  decade  1350-1360.  The 
depression  extends  nigh  up  to  the  end  of  the  fifteenth 
century.  The  misery  to  which  France  was  exposed  by  the 
outbreak  of  the  Jacqueries,  the  English  invasion,  and  con- 
tinuous disturbances  expressed  in  the  term  of  "  the  Hun- 
dred Years'  War  "  would  explain  very  easily  a  great  part 
of  the  remarkable  price  decline.  Our  author  says: 

"  If  the  hectare  fell  to  48  francs  in  1451-1475,  it  is  because  France,  bleed- 
ing and  depopulated  by  the  devastations  of  the  Hundred  Years'  War,  suffers 
the  last  consequences  without  having  found  the  time  yet  for  repairing  the 
waste.  The  plaints  addressed  by  the  representatives  of  the  provinces  to  the 
States-General  at  Tours,  in  1484,  show  how  persistent  the  scourge  has 
been." 

Slowly  recovery  is  made  from  the  very  low  tide.  The 
fifty  years  following,  it  is  stated,  show  no  very  marked 
increase  on  account  of  the  great  many  new  lands  then 
brought  into  cultivation. 

If  later  on  land  values  rise  to  the  positions  held  before 
the  beginning  of  the  English  wars,  is  it  not  as  well  to  as- 
cribe it  to  the  return  of  permanent  peace  and  the  internal 
improvement  to  which  France  could  devote  herself  after 


LITTLE   CHANGE  I  AT   VALUES.  l8l 

the  termination  of  the  destructive  wars,  as  to  the  discovery 
of  silver  in  America,  but  little  of  which  found  its  way  into 
France  at  that  time?  With  the  period  of  1675  to  1725 
we  find  a  turn  to  the  worse  again.  Surely  silver  mining 
had  suffered  no  abatement.  But  glory  had  to  be  paid  for 
again.  It  collected  its  tribute  from  the  generation  that 
was  tilling  the  soil  when  le  Grand  Monarque  was  gathered 
to  his  fathers. 

But  the  peace  and  the  improvements  in  agriculture 
which  characterized  the  greater  part  of  the  eighteenth 
century  showed  their  beneficial  results  in  higher  prices  of 
land  and  in  lower  corn  prices. 

Before  entering  into  a  discussion  of  them  I  will  give  in 
the  following  table  the  prices  of  corn,  of  bread,  and  of 
meals  at  inns.  These  three  headings  do  not  necessarily 
come  within  the  same  statement. 

They  form,  however,  an  important  measure  of  money 
value  when  used  jointly,  while  each  by  itself  would  per- 
haps not  cover  so  fully  the  point  at  issue,  that  the  prices 
of  commodities  move  entirely  independently  of  the  quan- 
tities of  money  in  circulation. 

The  prices  of  cereals  are  very  variable, — in  the  turbu- 
lent times  through  which  France  has  passed,  but  more  so 
yet  between  the  different  provinces,  than  would  be  the 
case  in  more  settled  periods.  Towards  the  end  of  the 
sixteenth  century  the  country  was  ravaged  by  robber 
bands  to  the  extent  that  a  writer  in  1585  exclaims:  "O 
le  miserable  temps  pour  n'oser  sortir  des  villes !  "  It  will, 
therefore,  be  more  generally  just  if  I  abstain  from  giving 
prices  of  the  several  departments,  and  only  quote  the 
general  average  grain  prices  from  the  tables  of  Mr. 
d'Avenel. 


1 82 


MONEY  AND  PRICES. 


II.— AVERAGE  PRICES  OF  WHEAT,  RYE,  OATS,  AND  BARLEY 
OF  BREAD  AND  OF  MEALS  PER  PERSON  AT  INNS. 


PERIOD. 

WHEAT. 

RYE. 

OATS. 

BARLEY. 

BREAD. 

MEALS 

Hectolitre. 

Hectolitre. 

Hectolitre. 

Hectolitre. 

Kilogramme. 

fcs.  cs. 

fcs.  cs. 

fcs.  cs. 

fcs.  cs. 

fcs.  cs. 

fcs.  cs. 

1200-1225. 

3.80 

1.90 

1-53 

1.30 

1226-1250. 

4.12 

3.76 

1.35 

1.  60 

1251-1275. 

5.80 

5.OO 

1.28 

1-93 

1276-1300. 

6.4I 

6.11 

1.32 

3-49 

1301-1325. 

8.66 

6.00 

2.30 

4.00 

\ 

1326-1350. 

6.70 

5.00 

3.00 

4.00 

\ 

I35I-I375. 
1376-1400. 

9.00 
4.66 

5.00 
2.80 

2.66 

2.OO 

3-30 

2.OO 

>•       O.26 

0.70 

1401-1425. 

7.20 

3-50 

1.90 

3.OO 

r\   i  *r 

0.65 

1426-1450. 

6.70 

4.60 

2-35 

3.15 

Y        O.I7 

0.80 

1451-1475. 

3-25 

2.30 

1.05 

1-55 

(.        o  08 

1476-1500. 

4.00 

3.00 

2.OO 

1.62 

0-45 

1501-1525. 

4.00 

3-30 

1.  60 

2.85 

1 

0-55 

1526-1550. 

7.00 

4.00 

2.40 

3-70 

>        O.O7 

0.90 

1551-1575. 

I2.OO 

9.00 

425 

6.00 

0.16 

0.70 

1576-1600. 

2O.OO 

15-70 

6.00 

8.75 

0.31 

i.  20 

1601-1625. 

14.25 

IO.OO 

3-75 

4.60 

0.27 

0.52 

1626-1650. 

Ig.OO 

13.00 

5-40 

9.00 

0.26 

0.69 

1651-1675. 

16.00 

8.00 

4-50 

5-70 

0.23 

0.68 

1676-1700. 

13-50 

9.00 

3-50 

6.50 

0.23 

1.06 

1701-1725. 

14.80 

9.00 

4.00 

8.70 

0.29 

0-93 

1726-1750. 

II.  OO 

6.70 

3.00 

4.80 

0.18 

0.61 

I75I-I775. 

13-25 

10.50 

4-40 

7-34 

0.20 

0.56 

1776-1800. 

15.00 

10.50 

6.90 

7.60 

0.16 

1.28 

Considering  the  many  vicissitudes  France  had  to  go 
through  from  the  beginning  of  the  thirteenth  century  to 
the  second  half  of  the  sixteenth,  the  prices  of  grain  show 
comparative  evenness  in  these  averages. 

At  the  middle  of  the  sixteenth  century  a  great  change 
springs  into  prominence.  Prices  are  about  double  the 
average  for  the  preceding  three  hundred  years.  The 
next  period  shows  a  still  further  increase.  Here  we  note 
the  highest  range  in  the  six  hundred  years,  the  subject  of 


THE  UNDEVELOPED  FOREIGN  COMMERCE.         183 

the  researches  of  Mr.  d'Avenel.  The  next  quarter  of  a 
century  shows  much  lower  prices  again,  succeeded  by  a 
range  nearly  as  high  as  in  the  previous  quarter,  and  then 
constantly  declining  prices,  till  the  lowest  price  level  is 
reached  in  1725-50.  The  average  here  for  all  the  four 
grains  is  barely  50  per  cent,  higher  than  for  1525-1550. 
We  have  here  a  price  condition  corresponding  with  that 
of  England.  The  rise  in  prices  in  France  begins  at  a 
somewhat  earlier  period  than  in  England.  The  abate- 
ment from  the  high-price  range  in  the  seventeenth  cen- 
tury antedates  the  English  abatement  by  about  the  same 
length  of  time. 

France,  no  more  than  England,  could  possibly  avail 
itself  of  the  treasures  from  the  New  World  when  they 
actually  began  to  make  their  appearance  in  the  circulations 
of  the  trading  communities  of  Europe.  There  was  no 
trade  or  commerce  which  could  bring  them  over  the  bor- 
der. A  hundred  and  fifty  years  after  this  epoch,  in  1715, 
the  foreign  commerce  of  France  amounted  only  to  71,- 
000,000  francs  in  imports,,  and  105,000,000  francs  in  ex- 
ports. How  insignificant  a  figure  must  the  foreign  trade 
have  cut  under  Henri  IV.  and  Louis  XIII.,  when  at  the 
end  of  the  glorious  reign  of  Le  Roi  Soleil  the  foreign 
trade  was  still  in  so  primitive  a  state  as  these  figures 
indicate. 

The  excess  of  exports  over  imports  did  not,  however, 
enrich  the  treasure  chests.  The  imports  show  only  the 
legitimate  trade.  Smuggling  was  conducted  on  so  great 
a  scale,  in  spite  of  the  risks  and  dangers  to  those  who  car- 
ried it  on,  that  the  contraband  trade  fully  absorbed  the 
credit  balance  shown  in  the  official  figures. 

From  these  facts  alone,  it  is  natural  to  infer  that  the 
money  stores  of  France  could  by  no  possibility  have 


1 84  MONEY  AND  PRICES. 

received  an  augmentation  by  which  the  great  rise  in  grain 
prices  could  be  explained. 

I  think  that  I  have  made  this  point  plain  enough  to 
dispense  me  from  offering  any  further  proofs  of  the  in- 
adequacy of  the  money-quantity  theory  to  explain  the 
price  phenomena  of  the  sixteenth  and  seventeenth  cen- 
turies. 

The  Inner  State  of  France  in  the  Seventeenth  Century. 

Safer  grounds  remain  from  which  to  explain  the  rise  in 
corn  prices.  As  one  of  the  reasons,  we  may  point  out 
that  the  town  population  in  France  was  being  increased 
by  the  great  ravages  suffered  by  the  country.  This  grow- 
ing town  population  certainly  made  a  greater  demand  on 
the  produce  of  the  soil,  with  agriculture  in  a  most  deplor- 
able condition  and  production  decreasing. 

The  population,  according  to  the  careful  estimate  of 
Mr.  Moreau  de  Jonn£s,  numbered  about  twelve  millions 
and  a  half.  Moreau  de  Jonnes,  on  the  authority  of  Bodin 
and  Boulanger,  two  writers  of  the  time,  gives  the  follow- 
ing picture  of  the  state  of  the  country.  He  says  : 

"  Two  facts  impress  themselves  ;  one  is  the  immense  extent  of  forest 
and  waste  lands  which  cover  half  of  France  ;  and  the  other  the  great 
extent  of  arable  land,  at  least  four  times  the  land  actually  under  seed.  Of 
the  three  hectares  and  a  half  to  each  inhabitant,  only  a  fifth  part  bears 
crops.  Double  fallows,  it  must  be  admitted,  gave  to  the  land  two  years  to 
rest,  and  made  it  possible  to  dispense  with  all  manure,  and  reduced  the  cost 
of  production  to  half  the  cost  at  the  present  time.  When  the  year  was  good, 
grains  were  at  a  price  which  ruined  the  agriculturist  and  determined  him  to 
lower  the  acreage  under  seed,  which  resulted  in  dearth  the  following  year."  * 

The  twelve  years  from  1589  to  1600,  according  to 
Moreau  de  Jonnes  and  Mr.  d'Avenel,  vary  as  follows  in 

*  Moreau  de  Jonnes,  Etat  Economique  et  Social  de  la  France,  1867. 


DISCOURAGING  AGRICULTURE.  1 85 

the  price  of  the  hectolitre  of  wheat:  1589,  12  francs  ;  1590, 
16;  1591,  55;  1592,  26;  1593,  16;  and  1594,  44.  Mr. 
d'A venal  gives  us  for  1597,  27;  for  1599,  12;  for  1600, 
8.35  francs. 

The  next  period  shows  much  lower  prices,  beginning  in 
1601  with  ii  francs;  1602,  12  ;  1603,  14 — the  average  for 
the  twenty-five  years  being  14.25  francs.  These  greatly 
varying  years  were  all  under  the  same  monetary  influ- 
ences, but  differently  affected  by  the  great  price-maker, 
the  sun. 

The  condition  of  the  people  was  one  of  extreme  misery 
throughout  the  seventeenth  century.  The  ruling  powers 
had  more  important  matters  to  attend  to,  in  the  first  half 
of  the  century  at  least,  than  to  care  for  the  prosperity  of 
the  people  and  to  promote  progress  in  agriculture  and 
industry. 

Henri  IV.  and  Sully  exerted  themselves  energetically 
in  this  direction  to  the  extent  that  the  weak  power  of  the 
crown  allowed.  Sully  traced  a  plan  for  a  general  draining 
of  the  marshes  which  still  abounded  all  over  France,  and 
began  on  a  large  scale  the  construction  of  canals  and 
roads.  But  after  him  and  after  Olivier  de  Serres  came  a 
complete  reaction,  and,  on  the  whole,  "  the  seventeenth 
century  occupied  itself  far  less  with  agriculture  than  the 
sixteenth."  * 

The  turbulent  times,  the  wars  of  the  Fronde,  and  the 
many  insurrections,  which  were  always  rudely  suppressed 
by  force  of  arms,  made  the  agricultural  situation  one  of 
worse  character  than  it  would  otherwise  have  been  under 
all  the  forbidding  circumstances  already  noted.  The  open 
country  was  always  subject  to  pillage  and  destruction. 

*  Dareste  de  la  Chavanne,  Histoire  dcs  Classes  Agricoles  en  France. 


1 86  MONEY  AND   PRICES. 

The  disbanded  soldiery,  as  well  as  the  great  multitudes  of 
dispossessed  burnt,  plundered,  and  murdered  without  re- 
straint. It  required  something  more  than  the  edicts  of 
Richelieu  and  Mazarin  to  enjoin  the  military  forces  from 
pillaging  the  country  districts,  as  if  in  the  enemy's  coun- 
try, and  the  publication  of  instructions  to  the  soldiery  to 
pay  for  what  they  took  from  the  poor,  unfortunate 
peasantry.  As  the  money-quantity  theory  of  prices  has 
found  its  chief  support  in  France  from  the  rise  in  these 
grain  prices,  I  may  perhaps  not  be  found  unnecessarily 
prolix  if  I  give  a  few  illustrations  delineating  the  political 
and  economic  aspect  of  the  country  and  the  condition  of 
agriculture  and  the  agriculturist. 

"  Crushed  under  the  load  of  arbitrary  taxes  of  all  kinds,  tailles,  tithes,  capi- 
tation taxes,  twentieths,  aides,  capitaineries,  salt  tax,  etc.,  etc.,  which  robbed 
him  of  all  the  fruits  of  his  labor,  and  the  forced  road  building,  which  took 
from  him  the  greater  part  of  his  time,  the  unfortunate  inhabitant  of  the 
country  had  to  endure  in  addition  the  still  harder  blows  of  the  many  civil 
and  foreign  wars  of  the  seventeenth  and  eighteenth  centuries  with  the  in- 
vasions which  came  in  their  train."  * 

Conditions  were  of  a  nature  that  "  they  led  our  poor 
peasants  to  kill  themselves  after  cutting  the  throats  of 
their  wives  and  children,  and  furnished  examples  of 
mothers  who,  in  the  delirium  of  hunger,  ate  their  own 
children,  as  happened  in  France  in  1639."  f 

An  eye-witness  states  that  the  soldiers  were  so  accus- 
tomed to  burn  down  the  villages,  that  around  Lons-le- 
Saulnier  he  could  not  anywhere  find  a  roof  standing. 

"And  as  if  all  these  accumulated  evils  were  not  sufficient,  as  if  Heaven 
had  wished  to  join  itself  to  all  these  enemies,  against  whom  the  peasant, 

*  G.  Saunois  de  Chevert,  L' Indigence  et  f'AftftfVft  (fanf  les  Camp agues. 
\ 


RAVAGING  THE  COUNTRY.  187 

Crushed  as  he  was,  did  not  even  try  to  defend  himself,  famine,  hideous 
famine,  was  almost  permanent,  with  the  full  train  of  calamities  which 
always  follow  in  her  tracks." 

Dearth  and  the  plague  in  1583  to  1587  ;  famine  in  1623  ; 
of  which  a  writer  says  : 

"  It  brought  contagious  diseases  and,  the  plague  following  it,  death 
carried  away  no  fewer  than  a  million  people."  * 

"In  the  train  of  the  Swedish  invasion  under  Gustavus  Adolphus,  with 
whom  Richelieu  had  signed  a  treaty  of  alliance,  the  plague  appeared,  com- 
mencing Easter,  1630,  not  to  disappear  before  the  spring  of  1637.  The  wolves 
came  to  complete  the  catalogue  of  calamities,  and  more  than  six  hundred 
thousand  Lorrainians  perished  from  famine,  the  plague,  the  sword,  cold, 
and  the  teeth  of  wild  beasts.  Villages  disappeared  to  the  last  man,  others 
had  but  a  hundredth  part  of  the  inhabitants  left,  and  parish  priests  were 
seen  harnessed  to  the  plow  with  their  parishioners  so  as  to  obtain  food  for 
their  own  support." 

The  ruling  powers  were  interested  in  these  calamities 
only  so  far  as  they  interfered  with  the  collection  of  their 
revenues,  which,  however,  were  not  the  less  ruthlessly 
extracted  because  the  exhaustion  was  so  complete. 
Richelieu  and  Mazarin  were,  in  regard  to  the  interest 
they  took  in  the  common  people,  no  better  than  their 
masters,  Louis  XIII.  and  the  execrated  Anne  d'Autriche, 
the  regent  up  to  the  time  of  Louis  XIV.  reaching  his 
majority. 

It  was  part  of  the  continental  statecraft  of  that  time  to 
keep  the  people  in  a  depressed  condition.  Richelieu's 
own  words  express  it  as  a  maxim  of  state.  "  The  people 
ought  not  to  enjoy  too  great  a  degree  of  prosperity  else 
they  become  indolent  and  inclined  to  revolt."  f 

*  Bonnemere,  Histoire  des  Paysans. 

f  "  II  ne  faut  pas  que  les  hommes  aient  trop  de  bien-etre,  sans  quoi  ils 
deviennent  indociles  et  sont  disposes  a  la  re  volte." 


1 88  MONEY  AND  PRICES. 

Under  Louis  XIV.,  thanks  to  the  wise  councillors  he 
collected  around  him,  some  progress  was  made  in  agricul- 
ture as  well  as  in  industry.  The  result  shows  in  the 
annual  average  yield  in  all  grains.  At  the  beginning  of 
the  seventeenth  century  it  is  given  by  Moreau  de  Jonnes 
as  49,000,000  hectolitres.  The  population  at  twelve 
millions  and  a  half  gives  3.92  hectolitres  per  head  (in- 
clusive of  seed).  In  1700  the  population  had  increased 
to  19,000,000,  including  the  new  territorial  acquisitions, 
and  the  grain  production  to  93,000,000,  which  is  4.85 
hectolitres  per  head.  The  condition  of  the  people  was 
wretched  enough  still.  How  miserable  they  must  have 
been,  and  how  this  must  have  affected  grain  prices  is  seen 
at  one  glance  when  we  make  comparison  of  this  larger 
product  with  that  of  the  present  time.  The  average 
annual  product  for  all  grains  is  a  rising  one.  The  ten 
years'  period,  1834-1843,  gives  198,980,000  hectolitres; 
1876-1885  gives  251,852,000  hectolitres  for  the  same 
number  of  departments  constituting  present  France. 
(From  the  report  of  the  Minister  of  Agriculture,  Statis- 
tique  Agricole  de  la  France,  published  in  1887.)  The 
returns  for  the  five  years  ending  with  1893  show  an 
average  of  261,000,000  hectolitres. 

Taking  the  population  at  38,000,000,  we  get  an  average 
return  of  6.87  hectolitres  per  head.  If  we  add  to  this 
(roughly  estimated  from  the  value),  an  average  of 
25,000,000  hectolitres  annually  imported,  we  have  a  gross 
of  7.53  hectolitres  per  head  of  the  population,  against  3.92 
hectolitres  at  the  beginning  of  the  seventeenth  century, 
and  4.85  hectolitres  at  the  beginning  of  the  eighteenth. 

But  this  is  not  all.  The  people  were  then  far  more 
dependent  on  bread  for  their  daily  subsistence  than  at  the 
present  time.  Potatoes  were  not  introduced  until  much 


INSUFFICIENCY  OF  FOOD   SUPPLY.  189 

later,  and  the  consumption  of  meat  was  nil  with  the 
poorer  classes,  while  now  it  forms  a  very  important  and 
increasing  part  of  their  diet.  Mr.  Moreau  de  Jonn£s, 
quoting  from  the  work  of  Scipion  deGrammont  Lc  Denier 
Royal,  published  in  1620,  says  that  compared  with  the 
price  of  labor  a  sheep  was  worth  five  times  as  much  as  in 
our  time  (1867). 

"  It  can  be  seen  that  mutton,  though  the  least  expensive  of  meats,  was  an 
impossible  luxury  under  the  reign  of  Louis  XIII.,  not  alone  for  the  peasant, 
but  for  the  middle  classes.  The  high  price  of  things  proves  their  scarcity  ; 
consequently,  the  animals  which  furnish  meat  to  the  butchers  were  then  in 
very  limited  supply."  * 

From  a  careful  analysis  of  the  statistics  of  annual  pro- 
duction and  of  the  wages  earned  by  a  peasant,  aided  by 
the  labor  of  his  wife,  Mr.  Moreau  de  Jonn£s  finds  that 
under  the  best  of  circumstances,  i.  e.,  grain  not  exceeding 
the  average  price,  a  peasant  could  not  have  bread  enough 
to  feed  himself  and  family  for  more  than  ten  months  in 
the  twelve.  John  Locke,f  travelling  in  France  in  1677, 
gives  figures  to  the  same  effect,  which  contrast  very  ma- 
terially with  the  statements  of  many  of  the  contemporary 
writers.  They  are  proved  by  the  researches  of  Mr.  Mo- 
reau de  Jonn£s  to  be  substantially  correct  as  to  both  the 
net  and  the  gross  product.  Vauban's  carefully  prepared 
statistical  statements  are  to  the  same  effect.  Moreau 
de  Jonn£s  points  out  the  noteworthy  fact  that  "  every 
third  year  showed  incomparably  worse  conditions ;  "  be- 
cause then  the  price  rose  one  half  above  its  decenninal 
average,  and  this  proved  a  state  of  scarcity  which  occurred 
fifteen  times  in  seventy-two  years.  By  a  much  greater 

*  Moreau  de  Jonnes,  &tat  fcconomique  et  Social  de  la  France. 
f  J.  Locke,  Journal  of  Travels  in  France. 


190  MONEY  AND  PRICES, 

and  more  terrible   fatality  the  price  rose  to  double  the 
average  price  ten  times  during  the  reign  of  Louis  XIV. 

"  Hence,  during  this  reign,  the  memory  of  which  is  perpetuated  among 
us  by  the  magnificence  of  so  many  monuments,  there  were  twenty-five  years 
of  scarcity  and  famine  ;  and  if  one  considers  years  of  scarcity  those  in  which 
the  annual  earnings  were  inferior  to  the  value  of  corn  necessary  to  the  sup- 
port of  life,  there  were  no  fewer  than  thirty-four,  that  is  to  say,  almost  as 
many  as  the  years  of  plenty." 

The  Burdens  of  Taxation. 

Whatever  improvement  Louis  XIV.'s  rule  may  have 
introduced  to  raise  the  inner  conditions  of  the  kingdom 
over  those  of  the  preceding  reign,  the  wars  he  carried  on 
heaped  burdens  upon  burdens  upon  the  poor,  so  that  the 
annual  exactions  for  the  benefit  of  the  crown  trebled  in 
the  space  of  sixty  years.  Moreau  de  Jonnes  shows  the 
following  figures  of  net  revenue  and  cost  of  collection  for 
the  year  1700: 

Tailles 90,000,000 

Capitation  (Head-tax) 41,000,000 

Dixieme  (Tenth) 50,000,000 

Gabelles  (Salt-tax) 41,000,000 

Domaines 40,000,000 

Customs  duties 25,000,000 

Sundry  taxes 50,000,000 

Cost  of  collection 122,000,000 


Total  francs 487,000,000 

These  enormous  burdens  were,  however,  considerably 
exceeded  by  the  exactions  of  the  nobility  and  clergy. 
The  consumption  (octroi)  and  other  communal  taxes  are 
not  included  in  any  of  these. 

If  all  these  are  added  to  the  budget  of  the  state  then  it 


THE  BURDENS  OF   TAXATION.  iQl 

is  surprising  that  the  nation  could  at  all  exist  and  propa- 
gate itself  in  view  of  the  limited  productive  capacity  of 
the  soil,  as  proven  above,  and  which  did  not  exceed  a 
gross  total  of  1,500,000,000  francs  according  to  the  careful 
investigation  and  well  sifted  estimates  of  Moreau  de 
Jonne"s,  taken  from  Vauban  and  other  trustworthy 
sources. 

The  worst  part  of  the  oppression,  however,  was  in  the 
ruthless  manner  of  collecting  the  taxes.  To  read  the 
description  reminds  us  of  the  barbarous  scenes  reported 
to  us  from  the  last  days  of  the  Roman  empire.  It  sounds 
almost  incredible  to  our  ears  to  be  told  by  Boisguillcbert 
that  "it  is  nothing  uncommon  to  demolish  a  house  worth 
10,000  tcus  to  draw  from  it  the  lead — twenty  or  thirty 
pistoles — which  the  proprietor  owes  to  the  fisc  and  which 
he  cannot  pay."  Extreme  as  this  may  appear,  yet,  at 
most,  it  is  an  aggravated  case,  descriptive  of  the  scourge 
under  which  the  people  were  made  to  suffer  the  agonies 
of  despair,  drove  the  cultivator  from  the  land  and  filled 
the  country  with  beggars  and  robbers,  who  under  a  more 
enlightened  system  would  have  been  active  creators  of  the 
country's  wealth  and  prosperity. 

But  if  the  taxes  and  burdens  were  increasing  and  the 
ability  to  contribute  was  declining,  the  contributors  them- 
selves were  reduced  in  numbers  by  an  act  of  folly  so 
stupendous  that  an  advanced  age  looks  in  vain  for  ex- 
tenuating terms. 

No  example  in  history  exists,  outside  of  Spain,  of  a 
king's  divesting  himself  of  the  services  of  his  most  in- 
telligent subjects  by  driving  them  into  neighboring  coun- 
tries. Louis  XIV.  by  his  own  folly  made  these  able  to 
become  formidable  competitors  of  his  own  suffering  and 
impoverished  people.  It  is  said  that  1,500,000  of  the 


192  MONEY  AND  PRICES. 

population  of  France  were  expatriated  or  killed  by  this 
glorious  ruler  because  they  did  not  wish  to  hear  mass  and 
preferred  to  worship  their  God  in  their  own  manner  and 
in  their  own  language.  By  this  act  of  fanaticism  much  of 
the  good  created  by  Colbert's  intelligent  institutions  was 
lost  again.  From  all  this  it  is  no  wonder  that  by  the  time 
of  Vauban  France  was  in  a  condition  which  impelled  him 
to  the  following  words : 

"  The  populations  are  impoverished  by  the  excess  of  taxes  to  the  privation 
of  the  nutriments  necessary  to  sustain  life.  Numbers,  thrown  into  despair, 
desert  their  country  or  perish  from  want.  These  evils  exist  at  the  time  I 
write  this,  and  are  even  constantly  increasing.  They  are  much  greater  than 
is  usually  supposed,  and  may  lead  to  most  disastrous  consequences  for  the 
body  politic.  They  are  of  a  gangrenous  nature,  and  corrupt  by  degrees  all 
the  parts  of  the  body  till  they  reach  the  heart.  This  comparison  ought  to 
be  well  considered.  It  gives  room  to  deep  reflections. 

"  The  highways  and  byways  are  filled  with  beggars  driven  from  home  by 
hunger  and  the  loss  of  all  they  possess.  They  are  the  tenth  part  of  the  pop- 
ulation, and  it  is  out  of  the  power  of  half  of  the  rest  to  give  them  alms, 
because  it  is  reduced  to  nearly  the  same  condition." 

In  another  place  of  the  same  memoir,  Projet  d'une  Dime 
Royale,  he  adds  in  illustration  of  the  onerous  system  of 
taxation  then  existing : 

"  Things  are  reduced  to  such  a  state  that  he  who  could  avail  himself  of 
his  ability  to  exercise  the  art  or  trade  in  which  he  is  skilled  and  which  would 
put  him  and  his  family  in  condition  to  live  a  little  more  at  his  ease,  prefers 
to  do  nothing  ;  and  he  who  could  keep  a  cow  or  two  and  some  sheep,  with 
which  he  could  improve  his  lands,  is  obliged  to  deprive  himself  of  them,  so 
as  not  to  be  crushed  by  the  taille  the  following  year,  which  he  would  be  sure 
to  be  if  he  made  something  and  his  returns  were  seen  to  be  somewhat  more 
abundant  than  usual.  It  is  for  this  reason  that  he  not  only  lives  very  poorly, 
he  and  his  family,  goes  almost  naked  and  has  but  the  meagrest  subsistence, 
but  also  lets  the  little  land  he  has  go  to  destruction,  working  it  by  halves 
only,  for  fear  that,  if  he  made  it  yield  all  it  is  capable  of  producing  by  fer- 
tilizing and  cultivating  it,  it  would  be  made  an  occasion  for  imposing  double 


VAUBAN*S  SItfGLE-TAX  PROJECT.  193 

taxes.  It  is  evident  therefore  that  the  first  cause  of  the  declining  returns  of 
the  land  is  poor  cultivation,  and  that  this  neglect  results  from  the  manner 
of  imposing  the  taille  and  of  collecting  it." 

With  such  a  calamitous  history  of  the  land  and  its  cul- 
tivators from  the  latter  part  of  the  sixteenth  century  down 
to  the  end  of  the  reign  of  Louis  XIV.,  the  price  history 
of  grains,  the  chief  product  of  agriculture,  for  that  long 
period  is  easily  explained,  without  recourse  to  stilted  and 
far-fetched  theories. 

Vauban's  enlightened  views  to  which  he  gave  utter- 
ance in  the  memorable  work  in  which  he  recommended 
the  abolition  of  all  taxes  save  the  single  tax,  "  la  dime 
royale,"  on  all  products  and  on  all  incomes,  brought  upon 
him  the  bitter  persecution  of  the  court.  His  work  was 
condemned,  and  he  himself  died  from  chagrin  and  despair, 
while  concealing  himself  from  the  searching  pursuit  of 
the  powerful  enemies  his  free  utterances  had  made.  His 
ideas,  however,  lived  and  bore  fruit  in  the  more  enlight- 
ened treatment  of  agriculture  and  the  general  improve- 
ment of  the  internal  conditions  of  the  country. 

Fortunate  seasons  aided  in  bringing  about  better  and 
better  results  in  the  years  of  the  seventeenth  century 
succeeding  the  death  of  Louis  XIV.,  results  shown  in  the 
prices  of  grain. 

The  general  average  for  the  period  of  1726-1750  in  the 
table  is 

For  wheat,  fcs.  n.oo  ;  for  rye,  fcs.  6.70  ; 
"    oats,        "       3.00;  and  for  barley,  fcs.  4.80. 

This  makes  an  average  of  fcs.  6.38  a  hectolitre  for  the 
four  grains ;  a  considerably  lower  price  than  the  average 

for  the  four  grains  for  the  period  1551-1575,  which  is  fcs. 
13 


IQ4  MONEY  AND  PRICES, 

7.81  a  hectolitre.  The  cheapest  years  in  the  prices 
recorded  by  Mr.  d'Avenel  are  the  ten  years  1727-1736. 
They  show  a  much  lower  range  : 

Wheat,  fcs.  8.40  ;  rye,  fcs.  3.78  ; 
Oats,        "     2.72  ;  barley,  fcs.  3.46. 

an  average  of  only  fcs.  4.59  for  the  four  grains.  This  is 
as  low  as  the  average  for  the  long  period  of  two  hundred 
years,  I25o-to  1450,  and  for  the  twenty-five  years,  152610 
1550,  the  period  still  belonging  to  the  time  preceding  the 
opening  of  the  Peruvian  and  Mexican  mines. 

If  we  express  the  price  average  of  the  long  period, 
1250  to  1550,  in  the  lower  silver  value  of  the  eighteenth 
century  the  price  difference  is  decidedly  in  favor  of  the 
time  of  1727  to  1736.  The  average  price  for  the  four 
grains  per  hectolitre,  counted  in  the  ratio  of  1:15  against 
i  :  ii  (as  the  general  average  for  the  300  years),  is  5.12 
francs,  while  the  average  for  1727  to  1736  is  but  4.59 
francs.  (Expressed  in  American  measure  and  money 
this  is  34.74  cents  as  the  medieval  price,  and  31.27  cents 
as  the  price  of  the  eighteenth-century  period  of  lowest 
prices.) 

What  lends  peculiar  interest  to  the  comparison  of  the 
seventeenth-century  and  eighteenth-century  grain  prices, 
upon  which  alone  the  assumption  can  be  based  of  the 
decline  in  the  purchasing  power  of  money,  due  to  the 
increase  in  the  money  stocks,  is  the  fact  that  the  gold  and 
silver  production  of  the  eighteenth  century  exceeded  very 
largely  that  of  the  seventeenth  century.* 

But  this  is  not  all.  Aside  of  the  fact  that  the  effect  of 
the  imputed  cause  exhausted  itself  at  the  start  in  grain 

*  See  tables  in  Chapter  II.  and  table  of  Chapter  VIII.,  page  151. 


WAGES  STATIONARY  IN  HIGH-PRICE  PERIODS.      195 

prices,  remains  the  important  consideration  that  it  has  no 
force  left  to  make  even  passing  impression  on  prices  of 
other  commodities,  nor  on  labor  either,  as  we  shall  see. 
Bread  even,  which  in  general  follows  the  price  of  grain, 
shows  a  greater  uniformity  throughout  the  six  centuries, 
down  to  recent  years,  if  we  except  the  low  range  from 
1451  to  1550,  than  is  noticed  in  grains. 

That  wages  and  other  expenses  did  not  follow  in  the 
rise  with  the  price  of  grain,  except  to  a  very  limited  ex- 
tent, as  will  be  seen  further  on,  undoubtedly  accounts  in 
a  large  measure  for  the  smaller  increase  in  the  price  of 
bread  than  in  that  of  grain. 

The  prices  of  meals  at  taverns  show  the  same  re- 
markable uniformity,  if  we  except  three  periods  of  a 
higher  range  interspersed  with  lower  prices,  /.  e.,  1576- 
1600;  1676-1725.  The  causes  for  these  higher  ranges  may 
not  be  far  to  seek.  The  prevailing  dearth  in  the  1576- 
1600  period  might  easily  explain  the  one  ;  the  depression 
caused  by  the  wars  of  Louis  XIV.,  the  other.  After 
that  the  price  falls  back  again  to  as  low  a  figure  as  in  the 
cheapest  of  times. 

It  is  plain  that  the  prices  of  meals  and  of  commodities 
for  the  laborer's  subsistence  must  keep  within  possible 
reach  of  his  wages.  The  commodity  may  deteriorate  in 
quality,  but  the  price  will  accommodate  itself  to  his  pur- 
chasing ability.  Bread  in  the  dear  years  changed  quality, 
as  is  well  known.  This,  in  connection  with  the  other 
cause  stated  above,  would  explain  the  less  violent  fluc- 
tuation in  its  price  than  that  of  corn.  How  little  wages 
were  affected  in  France  by  all  the  violent  economic  and 
political  convulsions  the  country  experienced  in  these  six 
centuries  I  will  show  in  the  following  table.  The  rates  are 
all  "without  board,"  except  7,  8,  and  9. 


196 


MONEY  AND   PRICES. 


III.— GENERAL  AVERAGE   OF   WAGES   FROM   THE   YEAR 
1201   A.D.    TO   THE   YEAR   1800. 


i. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9- 

10. 

Annual 

PERIODS. 

Agri- 
cultural 
laborer, 
jer  day. 

Male. 

Agri- 
cultural 
laborer, 
>er  day, 

Female. 

Vint- 
ner, 
per  day. 

Mason, 
ser  day. 

Car- 
penter, 
ier  day. 

Painters 
and 
Plaster- 
ers, 
f>er  day. 

Farm 
hands, 
per 
year. 

Male 
domes- 
tics, 
per 
year. 

Female 
servants 
on 
farms, 
per 
year. 

income 
of  male 
help  cal- 
culated 
per  250 
working 
days. 

I  IOI—I225 

Francs 

Francs 

Francs 

Francs 

Francs 

Francs 

francs 

francs 

francs 

francs 
ITi  .OO 

I226—I25O 

o.  65 

*  j  j  '  v 
125  .OO 

1251-1275 

O.6O 

I.Og 

I25.OO 

1276-1300 

O.6O 

0-95 

0.77 

I-I5 

45-00 

147.00 

1301-1325 

0.67 

0.90 

0.92 

I  .OO 

47.00 

75.00 

167.00 

1326-1350 

0.80 

0-55 

I.O4 

I  .02 

1.  06 

.IO 

55.00 

24.00 

2OO.OO 

I35I-I375 

O.QO 

I.I5 

I.I7 

•15 

80.00 

225.00 

1376-1400 

0.73 

0-55 

1.04 

0-93 

.  JO 

66.00 

72.OO 

37-00 

182.00 

1401-1425 

O.JO 

0.50 

0-75 

1.  10 

1.  08 

•13 

70.00 

5O.OO 

4O.OO 

175-00 

1426-1450 

0.65 

0.46 

0.87 

I  .OO 

0.99 

•05 

75.00 

45-00 

36.00 

I62.0O 

I45I-I475 

O.6O 

o  40 

O.gO 

0.87 

o-95 

.OO 

57.00 

24.00 

150.00 

1476-1500 

0.58 

0.32 

0.80 

i.  06 

0-95 

50.00 

46.00 

28.00 

145-00 

I50I-I525 

O.6O 

0-33 

0.81 

0.82 

0.86 

51.00 

47.00 

ig.OO 

150.00 

1526-1550 

o  70 

0-37 

0.96 

0.98 

1.14 

0.88 

48.00 

45.00 

30.00 

175.00 

I55I-I575 

0-75 

0.41 

0.86 

0.96 

i.  or 

.00. 

44.00 

40.00 

20   00 

188.00 

1576-1600 

0.78 

0-43 

0.91 

i  .20 

.19 

•  17 

60.00 

50.00 

29.00 

195.00 

1601-1625 

0.76 

0-45 

0.98 

i  .00 

.06 

.10 

63.00 

63.00 

42.00 

igO.OO 

1626-1650 

0.74 

0-53 

1-25 

0.90 

•  25 

•  15 

69.00 

66.00 

49-00 

185.00 

1651-1675 

0.80 

0-55 

1.07 

1.16 

.00 

.30 

80.00 

70.00 

45.OO  2OO.OO 

1676-1700 

0.80 

0.50 

0.89 

1.03 

.20 

^. 

68.00 

54.00 

4O.OO 

2OO.OO 

I70I-I725 

0.70 

0-37 

0.90 

0.98 

.00 

1.04 

71.00 

55-00 

37-00 

175-00 

1726-1750 

0.68 

0-45 

0.80 

0.94 

0.96 

0.90 

55  oo 

46.00 

30.00 

I7O.OO 

I75I-I775 

0-75 

0.47 

0.86 

0.90 

0.92 

I.  12 

63.00 

50.00 

35-oo 

188.00 

I776-I8OO 

0.82 

0.50 

T.OI 

i-i5 

1  .20 

1-25 

80.00 

77-oo 

42.00 

2O5.OO 

1890  

2.  5O 

i  .  =;o 

•i  .40 

•3.  70 

•j  .  eo 

mo.oo 

369.00  2  TO  on 

750  for 

«•    .     JV 

•  •  j^f 

J      T 

o  •  /  ^ 

j  •  0*-* 

J  J'-'  •  ^^ 

farm  ; 

300 

300  in 

days. 

house. 

The  Laborer  and  his  Subsistence. 

To  give  graphic  proof  that  the  high  prices  of  grain  in 
the  period  of  about  1560  to  1725  were  due  solely  to  the 
bitter  causes  illustrated,  we  need  only  compare  the  rate  of 
wages  with  the  prices  of  corn. 

To  make  this  clear,  I  will  draw  the  average  of  wages 


AND  GRAIN  PRICES  CONTRASTED. 


197 


for  the  period  1351  to  1550  and  the  average  for  1551  to 
1750,  and  put  these  averages  against  the  averages  for  the 
four  grains  per  hectolitre.  This  will  show  us  at  one  glance 
that  the  statements  of  the  preceding  pages  as  to  the 
suffering  of  the  working  classes  were  by  no  means 
exaggerated. 

IV.— STATEMENT  OF  THE  AVERAGE  OF  DAY  WAGES  OF 
THE  WORKING  CLASSES,  COMPRISED  IN  THE  SIX  FIRST 
COLUMNS  OF  TABLE  III.,  AND  OF  THE  AVERAGE  OF 
FOUR  GRAINS  PER  HECTOLITRE  IN  THE  PERIODS  1351 
TO  1550,  1551  TO  1575,  AND  IN  THE  PERIODS  1576  TO  1725 
AND  1726  TO  1750. 


Occupations. 

Average 
Rate  for 
1351  'o  '550- 

Average 
Rate  for 
1551  to  1575. 

Average 
Rate  for 
1576  to  1725. 

Average 
Rate  for 
1726  to  1750. 

i.  Agricultural  laborer,  male.  .  . 
2.            "                "         female. 

Francs. 

0.68 
0.42 
0.87 

Francs. 
0.75 
O.4I 

0.86 

Francs. 
0.76 
0.47 
I.OO 

Francs. 

0.68 

0-45 
0.80 

0.97 

0.96 

1.05 

0.94 

I.OI 

I.OI 

1.  12 

0.96 

6    Painter  and  Plasterer  

i.  02 

I.OO 

I.I5 

0.90 

Average  of  the  six  occupations.  . 
Average  price  of  the  four  grains, 

0.83 
3.48 

0.83 
7.80 

0.92 
9.70 

0.79 
6-37 

Rise  (+)  or  fall  (—  )  of  wages 

Per  cent. 

Per  cent. 

Per  cent. 
+  II.  O 

Per  cent. 
—  5.0 

Rise  of  price  of  grains  over  aver- 
age I1R  I  —  I?^O 

94.O 

178.0 

83.0 

Purchasing  power  of  six   days' 
wages,  in  hectolitres,  of  aver- 

Hectolitres. 
1.41 

Hectolitres. 
0.64 

Hectolitres. 
0.57 

Hectolitres. 
0.77 

It  will  be  seen  from  the  above  how  infinitely  better  the 
condition  of  the  working  classes  was  in  the  mediaeval  period 
than  at  any  time  since  the  middle  of  the  sixteenth  cen- 
tury. At  no  time,  excepting  the  low-price  period  of  the 
eighteenth  century  treated  above,  was  the  workingman 


198  MONEY  AND  PRICES, 

able  to  buy  with  his  wages  more  than  half  as  much  grain 
as  he  could  in  the  time  preceding  the  discovery  of  the 
new  silver  mines. 

The  abrupt  change  dating  from  1550,  nearly  doubling 
grain  prices  in  the  average  of  the  next  twenty-five  years, 
and  almost  trebling  them  in  the  long  term  of  one  hundred 
and  fifty  years  from  the  average  for  the  two  hundred  years 
preceding  1550,  gave  no  increase  in  wages  in  the  first 
twenty-five  years  of  the  great  rise  at  all,  and  only  1 1  per 
cent,  of  increase  after  1575,  to  offset  an  increase  in  grain 
prices  of  178  per  cent. 

The  happy  interval  in  the  eighteenth  century,  referred  to 
above,  made  conditions  supportable  again,  but  the  dear 
years  succeeding  in  the  century,  dating  as  in  England 
from  about  1765,  very  soon  threw  matters  back  to  where 
they  were  during  the  early  part  of  the  eighteenth  century. 
Much  of  what  followed  in  the  history  of  France  is  ex- 
plained by  these  price-facts.* 

*  The  portraiture  is  made  more  impressive  yet  if  we  discard  the  method  of 
averaging  grain  prices  by  regular,  set  periods  of  twenty-five,  fifty,  or  one 
hundred  years,  and  separate  the  dear  years  and  cheap  years  in  periods  imply- 
ing historical  changes,  such  as  I  delineated  in  the  preceding  pages. 

Thus  beginning  with  1561,  and  following  the  tables  of  Mr.  d'  Avenel,  we 
have  up  to  the  year  1600  but  three  years  with  the  price  of  wheat  at  less  than 
10  francs — the  hectolitre.  These  are  the  years  1561,  1564,  and  1600  with  an 
average  of  8.35  francs.  The  thirty-eight  dear  years  1562  to  1599  average 
the  famine  price  of  19.46  francs. 

The  forty  years'  period  preceding  1560,  i.  e,.  prior  to  the  Huguenot  wars, 
show  but  six  years  with  grain  above  10  francs — the  hectolitre,  an  average 
of  16.66  francs  ;.  while  the  average  for  the  thirty-four  cheap  years  is  but 
6.76  francs. 

The  period  of  1601  to  1668  shows  not  a  single  year  in  which  the  average 
for  wheat  was  below  10  francs.  The  average  for  the  whole  long  period  is 
17.30  francs. 

From  1669  to  1715  we  count  twelve  cheap  years  giving  an  average  of 
8.33  francs  and  thirty-four  years  averaging  16.96  francs. 

Thus  we  see  that  in  the  one  hundred  and  fifty  years  dating  from  the  out- 
break of  the  Huguenot  wars  to  the  end  of  the  reign  of  Louis  XIV.  only 


THE  LONG  SUCCESSION  OF  DEAR  YEARS. 


199 


The  Prices  of  other  Commodities. 

The  change  in  the  prices  of  other  commodities  is  equally 
illusory  and  gives  no  other  showing  than  what  we  found 
in  English  prices  in  the  preceding  chapters. 

In  this  class  we  find  the  same  conditions  expressed  as 
in  English  prices.  There  is  no  where  any  indication  that 
at  any  time  prices  were  raised  by  the  reputed  price  revoju- 
tion.  Iron  is  very  irregular  and  very  high  in  comparison 

fifteen  years  are  under  the  high-price  average,  and  one  hundred  and  thirty- 
five  years  of  scarcity  and  famine  prices. 

The  longest  succession  of  dearest  years  and  the  highest  average,  we  find 
in  the  time  of  smallest  money  supply,  but  in  the  time  characterized  more 
than  any  other  by  a  long  succession  of  inner  disturbances  and  civil  wars. 

The  period  of  1716  to  1765  gives  us  twenty-four  years  with  an  average  of 
8.07  francs  and  twenty-six  years  averaging  12.62  francs,  thus  showing  an 
average  of  10.45  francs  for  the  fifty  years  as  against  8,24  francs  for  1520  to 
1560.  Counted  in  the  ratio  of  the  eighteenth  century  brings  the  average  of 
1520—156010  11.23  francs,  a  somewhat  higher  range  than  the  average  for 
the  fifty  years  in  1716  to  1765. 

We  see  by  this  showing  that  the  averaging  of  prices  of  fixed-time  periods, 
which  I  followed  in  the  text  from  Mr.  d'  Avenel's  procedure,  gives  by  no 
means  so  full  a  demonstration  and  so  impressive  a  picture  of  the  price  situa- 
tion of  the  past  as  this  division  into  periods  measured  by  historical  events. 

The  period  1766  to  1800  has  but  a  single  year  when  the  average  fell  below 
10  francs,  and  shows  15.10  francs  as  the  average  for  the  whole  time  of  the 
other  thirty-four  years. 

I  will  add  here  the  statement  of  prices  of  wheat  divided  into  historic 
periods  in  tabulated  form. 

STATEMENT  OF  PRICES  OF  LOW  AND  HIGH  PRICE  YEARS;  AND  THE 
NUMBER  OF  YEARS  OF  LOW  AND  HIGH  PRICES  IN  THE  NAMED 
PERIODS: 


Price  under  10 

Number  of  Years 

Price  over  10 

Number  of  Years 

PERIOD. 

Francs 

with  Price 

Francs 

with  Price 

per  Hectolitre. 

under  10  Francs. 

per  Hectolitre. 

over  10  Francs. 

1521-1560  

6.76 

34 

16.66 

6 

1561-1600  

8-35 

3 

19.46 

38 

1601-1668  

— 

— 

17-3° 

68 

1669-1715  

8-33 

xa 

16.96 

34 

1716-1765  

8.07 

»4 

12.63 

»6 

1766-1800  

— 

i 

15.10 

34 

2OO 


MONEY  AND  PRICES. 


with  modern  prices.  It  certainly  does  not  show  any 
general  tendency  to  a  rise  from  what  may  be  called  the 
general  mediaeval  average.*  Lead  is  more  steady.  The 
average  for  1351  to  1550  is  51  centimes  ;  for  1551  to  1750 
it  is  52  centimes  the  kilo. 

V.    PRICES  OF  METALS,  WOOL    AND  WOOLLEN  CLOTH. 


Period. 

c 

o 

Kilo. 

1 
3 

Kilo. 

Wool- 
Raw. 

Kilo. 

Woollen  Cloth. 
Per  Meter. 

ist  Qual. 

2d  Qual. 

3d  Qual. 

Francs. 

Francs. 

Francs, 

Francs. 

Francs. 

Francs. 

1276—1300  

it 

°;?4 

0.43 
0.64 
0.78 
0.75 
0.45 
0.41 
0.82 
0.30 
0.50 

0.61 
0.61 
0.84 
0.32 
0.40 
0.31 
0.47 
0.28 
0.51 

0.40 
0.20 
'0.78 
0.67 

o-45 
0.38 
0.54 

0-34 
0.64 
0.61 
0.46 
0.36 
0.52 
0-54 
o-54 
0.64 

o-53 
o-53 
0.50 
0.50 
0.76 

0.91 
0.70 

I.OO 

0.90 
i  .30 

2.50 
1.30 
2.80 
0.80 
1.70 

1.  10 

1.90 

20.58 
32.11 
25-48 
29.18 
37.80 

2O.6o 

24.61 

45.36 
2O.OO 
21  .OO 
42.OO 
28.00 

25-00 
26.OO 

15.00 

12.33 

13-27 
I3-50 
14.06 
I3-63 
11.82 
10.98 
IO.I8 

12.96 

10.86 
15.96 
8.80 
9.20 
6.50 

6.00 
9.  10 

6.60 

5-83 
6.36 
4.58 
3-22 
5-49 
5-12 
4  19 
2.62 
4.14 
3-65 
4-72 
4.64 
3  42 
3.20 

2-75 

2./0 

4-50 
2.60 

2-45 
2.80 

noi—  1^2^   . 

1326—1350  

I-3CI—  I'JTC,  . 

n76—  ijoo.  .  . 

I4OI  —  1.12  5  .  . 

1.126—  I.1SO.  . 

I4CI—  I  47C  .  . 

1476—  moo.  .  , 

ISOI—  IS21?  .  . 

1426—  It  <tO.  . 

I5SI-IC7S  .  . 

1576—1600  

1601—1625  

1626-1650  

i6m—  1675.  . 

1676—1700  

I7OI—  172^  

1726—1750  

1751-1775  

I776-I7QO.  . 

The  manufacture  of  finer  woollen  cloths  up  to  the  middle 
of  the  seventeenth  century  had  no  existence  at  all.  The 
finer  cloths  were  all  imported  and  the  home  manufacturers 

*  The  average  for  the  period  1331  to  1550  is  57  centimes;  for  1551  to 
1751  it  is  5  f  centimes  the  kilo,  which  is  equal  to  5  cents  and  4^  cents  re- 
spectively the  pound.  Allowing  for  the  higher  silver  value  for  the  period 
the  price  is  equal  to  7  cents.  At  present  the  best  raw-iron  is  not  over  a 
tenth  part  of  that  price. 


THE  FRENCH    WOOLLEN-INDUSTRY.  2OI 

in  the  coarser  makes,  had  not  developed  even  to  a  state 
of  efficiency.  At  the  end  of  the  fifteenth  century  there 
were  but  fourteen  towns  in  all  France  (outside  of  Rouen, 
St.  L6  and  Montivilljers  in  Normandie)  engaged  in  the 
manufacture  of  woollens.*  With  Colbert,  the  manufacture 
of  the  finer  cloths  was  started  in  Carcassonne  and  in 
Sedan  where  Spanish  wools  of  the  finest  quality  were 
employed.  The  reduction  in  prices  follows  as  a  natural 
consequence  of  the  industrial  progress.  The  high  prices 
of  the  preceding  period  are  but  natural.  But  they  demon- 
strate clearly  the  economic  fallacy  of  the  money  theories. 
The  wool  prices  are  too  sparingly  given  for  the  time  pre- 
ceding the  middle  of  the  sixteenth  century  for  use  in  this 
discussion.  The  prices  vary  considerably  from  one  period 
and  another.  -  Wool  was  never  the  great  staple  in  France 
that  it  was  in  England,  and  it  would  be  very  bold  to  draw 
comparisons  from  these  records,  as  wool  is  a  very  variable 
quantity  so  far  as  quality  is  concerned.  But  even  if  we 
were  to  take  1.80  fcs.  the  kilo  as  the  general  average  price 
for  the  period  1600  to  1800,  this  would  be  a  low  price.  It 
would  be  equal  to  16  cents  the  pound  and  below  the  price 
of  English  wools  which  held  about  the  same  price  at  the 
end  of  the  eighteenth  century  it  held  at  the  end  of  the 
sixteenth  ;  but  was  considerably  below  the  fourteenth 
century  prices,  not  counting  even  the  altered  'ratio  of 
silver. 

Arthur  Young,  in  "  The  Question  of  wool  truly  stated," 
says: 

"  That  in  1787  unwashed  French  wool  cost  i6j.  \\d.  the  tod  of  28  pounds 
=  (14 \  cents  the  pound)  which  is,  washed,  equal  to  £2  zs.  bd.  (36^  cents  the 
pound)." 

The  wool  of  Berry  he  gives  as  ^"3  os.  od.  to  £$  $s.  a/., 
*  See  Moreau  de  Jonnt's^  Etat  Economique,  etc. 


202  MONEY  AND  PRICES. 

"  half  washed."  This  is  undoubtedly  a  higher  grade  and, 
certainly,  far  superior  to  the  kinds  of  wool  raised  previous 
to  1550.  To  these  latter  the  lower-price  wools  mentioned 
by  Arthur  Young  can  be  fitly  compared,  which  would  give 
then  an  equivalent  in  French  money  of  about  1.50  fcs. 
the  kilo.  (13  cents  the  pound). 

The  French  price  comparisons  which  we  have  conducted 
to  this  point  show  the  same  general  points  which  we  found 
in  our  English  records.  The  prices  vary,  but  on  the  whole 
show  no  material  rise  from  middle  age  prices,  reduced 
to  money  of  our  time,  up  to  the  end  of  last  century,  to 
which  period  Mr.  d'Avenel  has  led  them  down.  The  only 
great  difference  is  in  grain  prices.  The  proportionate  rise 
is  nearly  the  same  and  covers  also  the  same  stretch  of 
time.  We  shall  find  the  same  occurrence  in  German 
prices,  to  which  we  shall  turn  presently.  But  even  this 
difference  becomes  very  much  reduced  when  we  remember 
that  mediaeval  prices,  i.  <?.,  up  to  the  latter  part  of  the  six- 
teenth century,  are  given  in  a  much  higher  value  in  ratio 
of  silver  to  gold.  Mr.  d'Avenel  is  of  opinion  that  giving 
prices  in  silver  value  in  relation  to  gold  would  be  creating 
an  ideal  money  standard,  that  the  payments  were  made  in 
the  silver  equivalents  of  the  time,  and  have  to  be  consid- 
ered as  such.  This  may  be  correct  so  far  as  correspond- 
ing comparisons  of  the  time  are  made.  But  when  we 
measure  values  of  another  period,  when  these  very  altered 
relations  of  ratio,  i.  e.,  the  cheapened  price  of  silver,  have 
admittedly  caused  altered  price  conditions,  this  changed 
value  of  the  paying  medium,  has  necessarily  to  be  consid- 
ered. I  have  refrained  from  applying  this  change  in  the 
ratio  to  my  tables  of  prices,  intending  to  reserve  the 
statement  for  the  reader  to  give  it  the  weight  which  it 
undoubtedly  deserves  in  the  whole  record  of  English  and 


THE   CHANGED  RATIO  AND  PRICES. 


203 


French  prices.  In  the  German  grain  prices,  tabulated  in 
the  following  pages,  I  have  added  two  columns,  giving  the 
prices  of  wheat  and  barley  up  to  1600  in  the  coinage  value 
of  to-day.  The  reader  can  see  from  that  illustration  how 
much  nearer  to  mediaeval  prices  our  present  prices  and 
even  seventeenth  century  prices  come  if  reckoned  in  the 
present  coinage  value  of  silver. 

It  is  impossible  to  give  an  exact  statement  as  to  ratio 
in  the  past,  varying  as  it  was  as  to  time  and  place.  The 
statements  of  contemporaneous  writers  disagree  very 
materially  for  the  same  country  even.  The  average 
ratio  prior  to  1500  may  be  taken  around  I  :  II.  From 
after  1501  Soetbeer  gives  it  for  Germany,  the  Netherlands, 
and  France,  as  follows  : 


1501  to  1520  =  i 
1521  to  1540  =  i 
1541  to  1560  =  i 
1561  to  1580  =  i 
1581  to  1600  =  i 
1601  to  1620  =  I 
1621  to  1640  =  I 
1641  to  1660  =  I 
1661  to  1700  =  i 
1800  =  i 


10.75 
11.25 
11.30 
11.50 
11.80 
12.25 

M 

14-50 

15 

15.50 


Prices,  if  read  in  the  lower  silver  value,  would  therefore 
have  to  be  counted  as  follows,  taking  1800  as  "  100"  : 


1501  to  1520  =  144 

1541  to  1560  =  137 
1581  to  1600  =  131 
1621  to  1640  =110 
1661  to  =  103 


1521  to  1540  =  137$ 
1561  to  1580  =  135 
1601  to  1620  =  127 
1641  to  1660  =  107 
1800      =  loo 


A  Page  from  the  History  of  Prices  in  Germany. 

I  have  referred  in  another  place  to  the  history  of  prices 
and  money  in  Germany  and  to  Mr.  Stephan  Beissel's  in- 
vestigation of  the  records  covering  the  building  of  the 


204  MONEY  AND  PRICES. 

Cathedral  of  Xanten.  This  is  the  only  German  publica- 
tion known  to  me  in  which  a  continuous  history  of  prices 
and  moneys  at  one  place  is  carried  to  the  nineteenth  cen- 
tury. Xanten  lies  on  the  Rhine,  not  far  from  the  Dutch 
frontier.  It  was  part  of  the  archbishopric  of  Cologne,  and 
had  within  easy  reach  a  number  of  sovereignties,  all  of 
which  minted  their  own  money.  It  is  evident  from  this 
that  quite  a  variety  of  moneys  circulated  in  the  town 
and  were,  handled  by  the  chapter. 

The  money  of  account  into  which  all  of  these  had  to 
be  translated,  their  weights  and  values  varying  at  different 
epochs,  was  the  mark  of  Xanten.  Of  this  enough  has 
been  said  to  dispense  me  from  again  going  over  the 
ground.  Mr.  Beissel  gives  us  the  decennial  average  prices 
of  wheat  and  barley  from  1350  down  to  1838  ;  the  wages 
of  a  master  carpenter  and  his  man  from  1350  down  to 
1680 ;  and  the  prices  of  some  building  materials  and 
metals  down  to  the  beginning  of  this  century.  These  he 
all  gives  us  in  the  Mark,  Solidus,  or  Denier  of  the  Chapter. 
By  this  he  has  made  it  a  comparatively  easy  task  for  us  to 
read  the  price  history  of  nearly  five  centuries  of  very 
varied  money  relations.  All  we  have  to  do  to  make  the 
figures  intelligible  is  to  apply  the  change  in  the  value  of 
the  coins  which  the  different  periods  have  experienced, 
a  somewhat  incomplete  statement  of  which  has  been 
supplied  in  a  preceding  chapter. 

The  treatment  is  not  as  satisfactory  as  if  the  values  had 
been  figured  in  the  money  of  to-day,  as  was  done  by  Mr. 
d'Avenel  in  his  History  of  French  Prices.  We  have  in  Mr. 
Beissel's  statement  only  general  periods  for  which  the  re- 
lation of  the  money  of  the  period  to  the  mark  of  to-day 
is  given.  He  leaves  it  somewhat  in  doubt  when  the  change 
took  effect.  But  as  the  prices  are  quoted  in  decennial 


GERMAN  GRAIN  PRICES. 


205 


averages,  and  these  decennial  average  prices  agree  with 
the  figures  of  the  long  periods,  it  is  safe  to  accept  the 
ratio  given  for  the  period  which  is  marked  by  correspond- 
ing prices,  but  which  fails  of  close  identification  of  money 
ratio.  To  leave  the  least  possible  room  for  doubt,  I  have 
given  only  the  consecutive  figures  up  to  1550,  and  left  out 
some  of  the  intervening  decades  of  the  later  periods  on 
account  of  certain  omissions  in  the  statement  of  my  au- 
thority. I  shall,  however,  fill  in  the  prices  also  to  show 
the  general  coincidence  of  the  averages  with  the  averages 
for  which  I  have  supplied  the  values  of  the  moneys. 

I.— PRICE  OF  ONE  MALTER  (OF  XANTEN)  (4f  BUSHELS)  OF 
WHEAT,  AND  ONE  MALTER  OF  BARLEY,  GIVEN  IN  THE 
MARK  OF  THE  CHAPTER  ;  IN  THE  MARK  OF  TO-DAY  ; 
IN  THE  EQUIVALENT  IN  BUSHELS  AND  IN  AMERI- 
CAN MONEY  ;  PERIOD  1372  TO  1838. 

(Columns  8  and  9  give  prices  of  1373  to  1600  in  the  average  ratio  of  the  modern  period.) 


Prices  in  Marks  of 

_ 

"3 

Chapter. 

°jj 

|j2' 

J3 
"^   « 

JZ     . 

jj  S 

**  6 

3  i.! 

CSJ3 

In  Ratio  of 

Periods. 

L 

Z-  C 

i 

si 

J.I 

O   b 

".S 
°  «! 

|l 

SP 

to-day. 
i.e.  ii  —  15} 

4J     W 

1*3 

*s 

ii 

V 

"S. 

|j 

0" 

o1 

gQM 

*T*     • 

**  *-» 

^  « 

•c^ 

N 

H 

fe 

"•  *-*, 

« 

rt  — 

(X,^ 

pa 

JH 
H 

Wheat. 

Barley. 

Wheat. 

Barley. 

1361-1400 

Ift 

\\ 

2ft 

7 

J|ft 

$o.5oi 

$0.30j 

$0.704 

$0-43 

1401-1450 
1451-1480 

2 

*H 

i 

ft 

6 
6 

17 

0.61 
0.56 

0.32 
0.30! 

0.86 
0.78 

0.45 
0-43 

1481-1520 

ill 

zft 

3ft 

5f 

i8ft 

0.56 

0.36 

0.78 

0.50 

1521-1550 

2ft 

Jft 

3ft 

5i 

0.62 

0.41 

0.85 

0.64 

1551-1580 

5ft 

3ft 

4 

39ft 

1.05 

0.70 

1.42 

0.95 

1581-1600 

"ft 

I7|i 

3 

53 

1.64 

0.91 

2.  1  1 

I.I7 

1601-1620 
1621-1680 

I 

6ft 
8ft 

23ft 

3 
2* 

56ft 

1.72 

I.OI 

1.82 

1.09 

1681-1720 

8ft 

25 

2 

1721-1750 

14 

7,';2 

"ft 

1} 

32ft 

1.04 

0.59 

1.07 

0.61 

1751-1780 

25  ft 

13 

38ft 

1781 

26 

I3ft 

1 

26ft 

0.88 

0.48 

0.90 

0.49 

1838 

34* 

16} 

51 

I 

»» 

0.86 

0.43 

0.86 

0-43 

206 


MONEY  AND  PRICES. 


II.  WAGES  OF  A  MASTER  CARPENTER  AND  A  JOURNEY- 
MAN SAWYER  PER  DAY  IN  DENARS  (144^.  TO  THE 
MARK)  TRANSLATED  INTO  THE  RMK.  AND  PFENNIG 
OF  TO-DAY  ACCORDING  TO  THE  RATE  IN  TABLE  I. 
(1350  A.  D.  to  1680.) 

(Reichsmark  23.80  cts.) 


Wages  per 
diem 

I 

V 

Wages  in  Rmk. 
of  to-day. 

Price  per  bushel 
of 

V 

-8 

•s'S. 

Z 
Sf 

c  (  * 

«  «3  o 

"S  9, 

a 

S.2 

jl 

Period. 

J 

i 

o  fl* 

>4-.     "1      2. 

C    -4- 

1 

w 

V 

a 

rt 

1) 

°.S      M 

0   k, 

rt 

a 

c 

3 
0 

*-> 

•2.S 

i 
s 

a 

V 

^ 

"s 

K 

u  o 

!' 

O 

0j 

£ 

m 

.«>«£.  pf. 

Rmk.Pf. 

1360-1399 

37 

26 

7 

i.  80 

1.26 

$0.50^ 

$0.30^ 

1400-1450 

43 

34 

6 

i.  80 

1.42 

0.61 

0.32 

1451-1480 

38 

25 

6 

1.58 

1.04 

0.56 

0.30^ 

—  9 

—  12 

1481-1520 

33 

5f 

1.32 

0.56 

0.36 

-  9 

-27 

1521-1550 

36 

32 

5i 

1-34 

1.24 

0.62 

0.41 

+  15 

—  20 

1551-1580 

54 

53 

4 

1.49 

1.47 

1.05 

0.70 

+  70 

—  II 

1591-1620 

125 

129 

3 

2.58 

2.68 

1.70 

i  .02 

+  196 

+  ^S 

1621-1650 

189 

164 

2i 

3-27 

2.85 

1.90 

I.  IO 

+  220 

+  90 

1650-1680 

200 

189 

2 

2.78 

2.62 

1-52 

0.88 

+  155 

+  66 

In  Table  I,  I  have  calculated  the  prices  of  the  two 
grains,  reported  by  Mr.  Beissel  in  the  mark  of  the  chapter, 
in  Reichsmarks  and  carried  this  into  American  money 
and  measure  for  the  convenience  of  American  and  English 
readers.  I  have  also  added  two  columns  giving  the  prices 
in  the  new  relations  of  silver  to  gold,  which  gives  to 
prices  expressed  in  silver  a  very  different  value  in  the 
periods  previous  to  the  beginning  of  the  seventeenth  cen- 
tury from  those  succeeding  the  change  in  ratio.  This  is 
only  to  show  the  nearer  approximation  of  mediaeval  prices 
to  the  more  modern  prices,  if  both  are  expressed  in  the 
inferior  silver  value  of  the  later  time.  We  find  the 
same  rise  in  grain  values  in  the  latter  part  of  the  sixteenth 

*  Rise  is  marked  -j-  ;  Decline  is  marked  — . 


THE  THIRTY  YEARS'  WAR.  2O? 

century,  which  we  noted  in  the  French  price-history,  and 
going  all  through  the  seventeenth  century  as  in  the  price- 
history  of  England  and  France. 

It  is  hardly  necessary  to  dwell  upon  the  history  of  Ger- 
many of  the  seventeenth  century.  The  Thirty  Years'  War 
is  perhaps  one  of  the  most  appalling  chapters  in  the  history 
of  human  savagery.  Since  the  days  of  the  migrations  of 
nations  no  such  thorough  destruction  was  wrought  in  any 
other  European  country.  Not  one  third  of  the  popula- 
tion of  Germany  was  left  when  the  Westphalian  Treaty 
arrested  the  destroying  hordes  to  whom  friend  and  foe 
were  equally  inviting  prey.  That  tillers  were  few  and 
prices  were  high,  famine  and  disease  the  characteristics  of 
a  considerable  period  after  the  close  of  the  war,  are  facts 
so  well  established  that  folk  lore  is  full  of  reminiscences  of 
them.  The  horrors  of  the  time  are  to  this  day  the  theme 
of  the  fascinating  stories  which  help  while  away  the 
winter  evenings  in  villages  and  towns. 

But  no  sooner  had  the  wounds  begun  to  heal  than  the 
borders  of  the  Rhine  were  again  made  the  seat  of  san- 
guinary war.  The  horrors  of  the  wars  of  Louis  XIV. 
were  mainly  felt  there.  Whole  sections  were  laid  waste. 
The  atrocities  of  the  Thirty  Years'  War  were  re-enacted. 
It  is  easy  of  comprehension  from  all  this  that  grain  prices 
would  show  the  effect  of  the  conditions  which  characterize 
the  history  of  Germany  from  the  latter  part  of  the  six- 
teenth to  the  second  or  third  decade  of  the  eighteenth 
century. 

With  the  beginning  of  more  prosperous  times  after  the 
close  of  the  war  of  the  Spanish  succession,  we  witness 
also  here  the  appearance  of  a  new  price  era.  Grain  prices 
show  now  the  same  lowering  tendency  which  we  find  in 
French  and  English  prices.  I  need  not  dwell  to  any  ex- 


208  MONEY  AND  PRICES. 

tent  on  this  phenomenon  here,  as  I  have  dealt  extensively 
with  the  subject  when  treating  of  French  and  English 
prices.  That  the  three  leading  countries  of  Europe  all 
experienced  a  rise,  covering  nearly  the  same  period  under 
a  sufficiency  of  natural  causes,  and  that  a  decline  followed 
when  these  causes  had  abated,  is  abundant  refutation  of 
the  theory  that  the  quantity  of  money  in  circulation 
causes  the  rise  and  fall  in  prices. 

The  German  prices  after  the  high-price  period  show  a 
very  near  approach  to  the  prices  of  the  period  closing 
with  the  middle  of  the  sixteenth  century,  the  time  from 
which  the  decadence  of  Germany  begins.  But  even  this 
is  but  a  repetition  of  the  coincident  facts  in  English  and 
French  price-history. 

In  Table  II.  the  wages  show  the  history  of  the  times  in 
a  graphic  manner.  It  is  the  same  sad  story  told  by 
Thorold  Rogers  of  England,  and  in  the  French  price-his- 
tory given  above.  Wages  rise,  in  round  numbers,  but  65 
per  cent,  over  mediaeval  rates,  while  grain  prices  are  about 
200  per  cent,  higher.* 

The  most  highly  colored  description  of  the  effect  of 
high  prices  of  corn,  whatever  the  cause,  on  the  fate  of  the 
working  classes,  would  pale  alongside  of  the  eloquence  of 
these  figures. 

*  Next  to  the  war  the  deterioration  and  debasement  of  the  coinage  had 
much  to  do  \vith  this.  I  have  referred  to  the  state  of  the  debasement  of  the 
currencies  of  Germany  in  the  seventeenth  century  in  preceding  pages.  Prices 
advance  rapidly  under  such  debasement  but  wages  creep  up  very  slowly  and 
seldom,  and  then  only  under  very  favorable  conditions,  work  up  to  the 
standard  of  altered  prices.  These  favorable  conditions,  however,  were 
entirely  wanting  in  the  seventeenth  century  in  Europe,  a  century  in  which 
all  the  refining  and  redeeming  features  of  the  Renaissance  period  became 
lost  and  the  freedom  and  independence  of  the  community  were  submerged 
in  a  general  sweep  of  absolutism  and  oppression. 


W 'AGES  AND   GRAIN  PRICES. 


209 


With  the  help  of  these  facts  the  few  prices  quoted  in 
Table  III.  will  also  find  an  explanation.  Destructive  wars 
would  necessarily  show  their  effect  first  on  bulky  materials 
as  a  rule  brought  from  a  considerable  distance. 

III. — PRICES   OF  CERTAIN    BUILDING    MATERIALS   IN   DE- 
NARS   OF  XANTEN  AND   IN   THE   MARK  OF  TO-DAY. 

(One  mark  =  2j.8o  cents.} 


1000  BRICKS 

i  MAI.  i  KI; 

i  LOAD  OF 

i  POUND  OF 

ioo  LATH 

i  POUND  or 

OR  TILES. 

LIME. 

SLATR. 

LEAD. 

NAILS. 

WAX. 

PERIOD. 

i 

| 

V 

I 

a 

e 

• 

V 

E 

V 

S 

1 

jt 

6 

e 

•g 

a 

jt 

B 

B 
• 

1 

Q 

M 

Q 

(4 

Q 

Q 

M 

Q 

Q 

1361—1400   

177 

8.60 

90 

2.  JO 

Ml 

6.^6 

0.  17 

•» 

0.  147 

1O 

T     16 

I4OI—  I4SO.  . 

22O 

Q.  17 

6S 

2.  7O 

170 

7.08 

6 

O.2S 

A 

o.  166 

2O 

0.8l 

1451-1480  

170 

7.O8 

52  2.  15 

1  80 

7   co 

5 

O.2O7 

0.  147 

14 

I    .42 

1481-1520  

170 

6.80 

48  I  -OI 

IU2 

7.  CO 

4ft 

O.  171 

4 

o.  16 

40 

T    60 

1521—1550  

2  10 

8  80 

48 

I.  8l 

T7R 

6  77 

O.  I  S2 

1l 

O.I7 

I    71 

1551-1580    

soo 

11.87 

QC 

2.6O 

2QO 

8.0*; 

IO 

O.  27 

8 

o.  20 

CO 

1  .47 

1581—1600  

2  7O 

5.6O 

44  C 

IO.  12 

1C 

0.  11 

11 

0.26 

1  08 

2   25, 

l6oi—l62O  

I7OO 

29.60 

IIS 

c,  65 

865 

jc    10 

21 

0.  1Q 

18 

o.  10 

l6< 

2.8o 

l62I—l68o  

2OSO 

28.14 

62O 

8.61 

IQOO 

26.4O 

•?6 

o.  16 

2S 

o.is 

i  So 

2.  SO 

l68l-I72O  

2500 

2^.OO 

6qo 

7.T8 

l6OO 

16.80 

12 

0.  11 

?6 

O.  27 

1  80 

2.O8 

I7QO-I7QQ.  . 

1320 

6.  10 

22OO 

10.28 

63 

O.2Q 

15Q 

t    65 

Average,    1360-1550 

8.18 

2.16 

7.08 

0.20 

0.16 

1.39 

do.       1601-1720 

25-38 

6.01 

15.40 

O.32 

0.29 

2.41 

Average,  1360-1550 
in  silver  value  of 

1621—1720  

IO.QO 

f  86 

9.40 

O.28 

O.21 

I    80 

Percent.    1601-1720 

over  first  period. 

131 

138 

65 

14 

26 

23 

Percent.    1790-1799 

over  first  period.  . 

"5 

9 

26 

—  8 

210 


AND 


The  rise  in  prices  .is  smallest  in  small  articles,  produced 
near  the  place  of  consumption,  such  as  nails  and  wax,  or 
in  articles  of  small  bulk  relatively  to  value,  such  as  lead. 
These  show  but  little  above  the  percentage  of  difference 
which  wages  show  in  excess  of  mediaeval  wages.  Work- 
manlike dexterity,  inventiveness,  and  flexibility  of  organiz- 
ation had  experienced  very  decided  decline  from  the 
high  development  which  distinguished  the  German  indus- 
trial world  of  the  two  centuries  closing  with  1550.  With 
no  improvement  in  the  system  of  labor  the  price  of  in- 
dustrial commodities  must  closely  conform  to  the  ruling 
ratio  of  wages. 

Expressed  in  modern  silver  value  these  latter  articles 
in  the  two  price  divisions  show  so  close  an  approximation, 
that  little  remains  upon  which  could  be  based  even  the 
most  strained  argument  for  proving  the  money-quantity 
theory. 

Compared  with  the  prices  of  1790-1799,  these  differ- 
ences become  so  minimal  that  they  disappear  in  some 
instances. 

Before  closing  this  chapter  I  will  give  a  comparison  of 
a  few  prices  of  meat,  poultry,  and  farm-produce,  quoted 
by  Mr.  Beissel.  These  I  shall  state  in  present  money 
only,  with  the  original  quotation  of  deniers  in  parenthesis. 
The  prices  are  not  in  equally  continuous  quotations. 


1370-79- 

1420-99. 

1540-59- 

1790-99. 

Ham,  per  pd.. 

(5)   4-78  cts. 

(12)    8.  25  cts. 

Pork     "     " 

(5)   4-78    " 

(8)    5-50  " 

(45)    5-  H  cts. 

Beef      "     " 

(n)    7.20  " 

Capon,  one..  . 

(20)  19.12   " 

(23)15-55   " 

(170)  18.6    cts. 

Chicken,    " 

(7i)  8.35  cts. 

(6)    5-95    " 

(14)    9.60  " 

(60)    6.66    " 

Eggs,   loo.... 

(29)  33.25  cts. 

(30o)33-32   " 

CORROBORATING  EVIDENCE   CONCLUSIVE.         211 

Few  as  the  quotations  are  which  I  can  give  in  the  last 
column,  they  are  very  significant  when  compared  with 
the  mediaeval  price  columns.  They  show  conclusively 
what  has  been  already  pointed  out  in  another  place,  that 
prices  of  farm  produce  and  meats  are  rather  stable,  and 
change  only  when  altered  economic  and  commercial  con- 
ditions make  an  inroad  into  the  old  economy,  and  open 
up  markets  which  had  no  existence  previously.  These 
conditions,  however,  were  not  present  in  the  Germany 
of  the  first  half  of  this  century  and  neither  were  prices  of 
this  class  of  commodities  higher  in  1850  than  they  were 
in  1350  to  1550.* 

The  prices  of  home  manufactured  articles,  cloths  and 
wearing  apparel,  which  I  find  quoted,  point  the  same  in- 
formation as  in  table  III. 


RATIO  o 

ri:i5#. 

Year. 

Article. 

Denars. 

In  mark  of 
to-day. 

In  dollars. 

1-170    . 

An  ell  of  good  cloth  

84 

6  S2 

I  SS 

I  180  .  . 

An  ell  of  good  linen  

je 

I  OO 

O  24. 

I^QO.  . 

A  coat  

4^2 

2Q.4O 

7  OO 

1  4  2O.  . 

An  ell  of  black  cloth 

108 

e  ge 

I  4O 

1  4  1O  .  . 

An  ell  of  medium  cloth 

ca 

2  OO 

o  70 

I  140  .  . 

An  ell  of  coarse  grey  cloth 

48 

2  80 

0  68 

I44O.  . 

An  ell  of  fine  grey  cloth  .  . 

1  2O 

7.OO 

I  7O 

*  The  few  illustrations  cited,  on  the  contrary,  point  to  higher  prices  in  the 
period  1350  to  1550  than  in  the  last  decade  of  theeighteenth  century.  If  we 
contrast  the  industrial  activity  and  general  prosperity  of  the  time  closing  with 
about  1550  with  the  stagnant  conditions  in  the  latter  period,  these  prices  are 
but  natural  exponents  of  the  conditions  prevailing  in  the  Germany  of  that 
time,  during  which  the  purchasing  power  of  the  industrial  classes  was  re- 
duced to  the  lowest  possible  minimum. 


212  MONEY  AND  PRICES. 

In  giving  these  prices  their  proper  value,  we  must  not 
overlook  the  fact  that  the  economic  development  of  the 
lower  Rhine  country,  at  this  period,  was  quite  in  advance 
of  the  England  of  the  seventeenth  century  even  ;  Cologne 
was  especially  reputed  for  its  cloth  industry.  The  cloth 
weavers  were  its  most  powerful  guild.  Linen  was  a 
prominent  industry  of  the  surrounding  country.  The 
trade  of  Cologne  rested  largely  upon  these  two  staples. 
Yet  who  would  not  see  at  first  glance  that  the  articles 
quoted  could  be  easily  procured  to-day,  or  at  any  pre- 
vious time,  at  the  prices  named  ? 

The  kind  of  ell  is  not  mentioned.  But  the  ell  of  com- 
merce in  use  in  the  lower  Rhine  country  up  to  very  recent 
times  was  the  ell  of  Brabant  =  69  centimetres,  or  27 
inches.  The  ell  of  Cologne  did  not  differ  much  from  this. 
The  number  of  ells  accounted  for  a  coat  agree  with  this 
presumption. 

With  this  allowance  to  bring  the  ell  up  to  our  yard 
measure,  we  can  quickly  see  the  high  character  of  these 
prices.  It  will  be  admitted  that  at  no  time  within  recent 
experience  would  these  prices  not  have  been  considered 
very  dear.  It  is  needless  to  go  into  fuller  detail.  I  could 
have  added,  perhaps,  more  extensive  data  for  illustration. 
But  as  the  price-history  of  England  and  France  so  com- 
pletely demonstrates  the  same  facts,  any  more  proofs 
would  be  useless  and  tiring  amplification. 

In  view  of  all  the  facts  introduced,  any  argument  on 
my  part  would  be  filling  space  without  adding  to  the  ful- 
ness of  the  demonstration  brought  out  in  these  chapters, 
that  prices  are  not  the  effect  of  the  accidental  relations 
of  money  quantities  to  merchandise. 

In  the  succeeding  chapters  I  shall  show  the  actual  fac- 
tors which  make  the  prices  of  commodities. 


THIRD  PART. 


THE  TRUE  PRICE-MAKING  FACTORS. 


213 


CHAPTER    X. 

Relation  of  the  Share  of  Labor  to  the  Cost  of  the  Product. — Comparison  of 
Wages  and  of  the  Corresponding  Cost  of  Labor  in  the  Product  in  Differ- 
ent Countries. — There  is  no  Connection  between  Time- Wages  and  Labor 
Cost. — Fall  in  the  Cost  of  Labor  and  Rise  in  the  Rate  of  Wages  in  In- 
dustries, Manufacturing,  Mining,  and  Agricultural  within  the  Century. — 
The  Cotton  Industry  as  an  Illustration — The  Iron  and  other  Industries. 

FOREMOST  among  the  elements  that  make  prices  stands 
the  cost  of  labor.  A  real  rise  in  wages  started  in  England 
at  the  time  of  the  Revolution,  and  has  progressed,  with 
interruptions  and  even  retrogressions  at  certain  periods, 
until  it  has  reached  the  maximum  figure  of  the  present 
time.  In  France  the  rates  have  always  been  lower  than 
in  England.  But  a  progressing  rise  from  the  time  of  the 
French  Revolution  *  to  the  present  day  can  be  demon- 
strated with  absolute  certainty.  In  Germany  the  wages 
in  the  first  half  of  this  century  were  painfully  small.  Only 
after  the  half-successful  Revolution  of  1848  removed  some 
of  the  worst  encumbrances  of  mediaevalism  which  the 
Congresses  of  Vienna  and  of  Laybach  had  fastened  again 
on  the  unfortunate  country,  did  things  begin  to  mend. 
From  1870  on  a  considerable  turn  to  the  better  is  observ- 
able. In  America,  wages,  always  higher  than  in  European 
countries,  the  rise  from  1850-1860,  down  to  the  present 
time,  varies  from  50  to  100  and  even  150  per  cent. 

*  Mr.  Yves  Guyot,  in  his  valuable  work  La  Science  £conomique,  has  col- 
lected the  wages  paid  in  various  occupations  at  different  periods  in  Paris  and 

215 


2l6 


MONEY  AND  PRICES. 


Rise  of  Wages  and  Decline  of  Cost. 

But  the  steady  rise  in  wages  has  gone  hand  in  hand 
with  an  equally  steady  decline  in  the  cost  of  labor  in  the 
product.  It  is  not  a  bold  assertion,  but  quite  in  keeping 
with  the  facts  in  the  case,  as  we  shall  see,  that  the  rate  of 
wages  is  in  an  inverse  ratio  to  the  cost  of  labor.  It  is  a 
demonstrable  fact  that  in  countries  where  the  wages  are 
lowest  the  cost  of  product  is  highest,  and  vice  versa. 

Where  we  meet  with  such  contradictions  of  what  is 
usually  assumed  as  a  well-settled  theory,  /'.  e.,  that  the 
rate  of  wages  determines  the  cost  of  production,  it  cannot 
surprise  us  that  so  much  confusion  should  still  prevail  on 

in  the  provincial  towns  of  France,  for  both  male  and  female  labor.  The 
same  proportionate  increase  is  noticeable  for  Paris  as  for  the  rest  of  France, 
and  in  male  labor  the  same  as  in  female  labor.  For  briefness,  I  quote  only 
the  table  referring  to  the  building  trade  : 

AVERAGE  RATE  OF  WAGES   PER   DIEM    OF  WORKINGMEN   ENGAGED 
IN   THE  BUILDING   TRADE    IN   PARIS. 


1805. 

1840. 

1853- 

1866. 

1875- 

1883. 

Rise. 

jr.*. 

fr.  c. 

fr.  c. 

fr.c. 

fr.c. 

4.OO 

fr.c. 

Percent, 

6  7* 

8.00 

88 

6  24 

4-75 

179 

8.50 

183 

3.2^ 

115 

Blacksmith  

According  to  J.  B.  Say,  Traitt  cT  Economic  Politique,  wages  had  risen 
about  50  per  cent,  in  the  time  of  the  empire  from  the  time  before  the  Revo- 
lution. They  kept  on  the  same  level  until  into  the  forties.  From  then  only 
the  steady  rise  is  noticeable,  as  seen  in  the  figures  here  quoted. 

1  The  Limousin  goes  in  the  season  to  Paris  and  other  large  towns,  and  returns  to  his 
country  home  when  building  operations  stop  during  winter, 


THE  ERRONEOUS  WAGE-VIEWS.  2 1/ 

this  question  of  first  importance  in  a  rational  price 
theory. 

The  most  fundamental  errors  have  been  propagated  by 
confounding  the  wages  of  the  laborer  with  the  cost  of  the 
labor  in  the  product.  Writers  always  have  the  day  rate 
of  wages  in  view  when  they  deal  with  the  question  of 
relative  cost.  The  rate  of  wages  is  one  thing,  the  pay  for 
a  certain  amount  of  work  done  is  quite  another.  Wages 
concern  the  workingman  as  a  consumer,  and  are  of  im- 
portance to  the  producer,  inasmuch  as  the  workingman  is, 
by  the  larger  or  smaller  amount  he  receives,  either  en- 
abled to  keep  the  human  machine  in  condition  or  forced 
to  let  it  run  down  for  want  of  sufficient  nutriment.  High 
wages  are  an  element  of  strength  to  the  producer.  The 
payment  for  the  work,  however,  is  quite  another  thing. 
This,  the  cost  per  piece,  concerns  the  employer,  and  is  the 
only  element  that  has  to  be  considered  as  one  of  the  price- 
making  factors.  Had  the  propounders  and  defenders  of 
the  old  theories  gone  into  factories  and  workshops  to 
gather  their  information,  instead  of  formulating  them 
from  preconceived  notions,  much  bitter  warfare  could 
have  been  saved  to  the  world.  The  employers  of  labor  still 
can  not  free  themselves  from  the  notion  that  a  high  rate 
of  wages  necessarily  involves  a  high  cost  of  production. 

The  wage  theories  referred  to  have  been  accepted  by 
the  employing  classes,  and  were  as  readily  taken  up  as 
axioms  by  those  who  have  striven  for  the  elevation  of  the 
working  classes,  and  have  undoubtedly  been  animated  by 
the  most  humane  considerations.  The  so-called  iron  law 
of  wages  is  the  theory  upon  which  all  the  socialistic  and 
communistic  leaders  rest  their  argument. 

But  there  is  not  a  scintilla  of  truth  in  the  doctrine  of  an 
iron  law  of  wages.  Wages  usually  are  highest  when 


218  MONEY  AND  PRICES. 

profits  are  highest.  Both  are  regulated  by  the  demand 
for  the  product  of  labor. 

And  wages  rise  in  direct  proportion  with  the  rise  in 
the  productiveness  of  labor,  whatever  may  augment  this 
sine  qua  non  of  all  wealth,  profit,  and  wages. 

This  will  be  seen  from  the  consideration  of  the  neglected 
element  in  the  question  ;  the  mode  of  payment  of  the 
labor.  In  all  employments  engaged  in  the  production  of 
salable  articles  the  work  is  directly  paid  by  the  piece  rate 
or  the  day  rate  gauged  by  the  output.  Wherever  it  can 
be  applied  the  piece  rate  prevails.  When  a  day  rate  is 
established  it  is  gauged  on  a  fixed  daily  output.  In  some 
of  the  silk  mills  of  Crefeld  I  found  the  maximum  day  rate 
of  weavers  fixed  at  3  marks.  The  number  of  yards  of  the 
daily  output  was  regulated  by  the  quality,  the  number  of 
shoots  of  the  meter.  Where  this  maximum  was  not 
reached  corresponding  deductions  were  made.  As  an 
excess  of  earnings,  from  higher  exertion,  leads,  in  the  ex- 
perience of  workingmen,  to  reduction  in  the  piece  rate,  it 
is  plain  that  few  are  anxious  to  make  their  superior 
ability  an  instrument  for  their  own  discomfort. 

In  the  old  system  of  work  in  vogue  at  the  time  of 
Ricardo  the  pay  by  the  piece  was  very  general.  The 
house  industries  supplied  the  manufacturing  merchant 
with  the  supply  of  goods.  The  weaver  received  his  yarn 
and  returned  the  woven  goods,  and  received  his  stipulated 
pay  per  yard.  A  great  deal  of  the  German  textile  trade 
to-day  is  conducted  on  the  same  basis.  The  yarn,  before 
the  great  inventions  were  put  into  operation  and  enabled 
the  introduction  of  the  factory  system,  was  spun  in  cot- 
tage homes,  and  certainly  could  not  be  paid  at  any  other 
than  piece  rate.* 

*  Arthur  Young,  in  Travels  in  Ireland^  tells  us  of  the  large  exporting  trade 


LABOR   COST  AND  TIME  WAGES.  2\g 

Up  to  very  recent  years  the  peasant  girls  of  Germany, 
and  the  town-bred  girls,  too,  were  in  the  habit  of  procur- 
ing their  marriage  outfits  from  the  fruit  of  the  spinning 
wheel. 

of  Ireland  to  England l  in  worsted  yarns  on  account  of  the  lower  wages  paid 
to  spinning  girls,  saying  that  they  received  from  l\d,  to  3</.  a  pound  (5  to  6 
cents).  In  England  $t/.  to  6</.  was  paid  (loto  12  cents).  Sir  Frederic  Eden, 
in  The  Stale  of  the  Poor,  gives  the  daily  earnings  of  a  spinner  girl  in  1787  as 
"]d.  Arthur  Young  in  another  place  quotes  them  for  about  the  same  time  as 
6J</.  At  the  present  time  the  spinning,  doubling,  and  twisting  of  a  fine 
combed  yarn,  so-called  2  fold  40  yarn,  costs  4.20  cents  in  Bradford,  Eng- 
land, 4.92  cents  in  a  mill  in  Pennsylvania,  the  accounts  of  which  I  examined 
in  1887,  and  5  cents  in  a  Rhode  Island  mill,  taken  from  the  mill  accounts 
by  me  in  the  summer  of  1894. 

The  wages  of  a  spinner  girl  in  a  woollen  factory  in  England  are  to-day 
about  2s.  (about  50  cents)  per  diem,  and  in  America  75  cents. 

The  yarns  here  mentioned  by  Arthur  Young  bear  no  comparison  with  the 
yarns  quoted  by  me  as  present  product.  This  yarn  is  of  fine  Botany  wool 
and  greatly  finer  than  any  spun  out  of  Irish  or  English  wool  a  hundred 
years  ago. 

But  putting  them  side  by  side,  with  this  mental  reservation,  then  even  we 
have  the  remarkable  fact  here  illustrated  : 

Per  diem.  Yarn,  per  pd. 

Wages.  Labor  cost 

Cents.  Cents. 

1767-1778,  England 12}  n 

1767-1778,  Ireland 6  5! 

1887,  England 50  J,\ 

1887-1894,  America 75  5 

In  the  summer  of  1894,  while  officially  engaged  with  the  Finance  Com- 
mittee of  the  Senate  in  Washington  in  collecting  statistical  information 
bearing  on  tariff  legislation,  I  received  from  Mr.  Elijah  Helm,  the  Secretary 
of  the  Chamber  of  Commerce  of  Manchester,  valuable  information  which  he 
procured  for  me,  among  which  the  following  data  on  wages  and  labor  cost 
in  a  spinning  mill.  He  writes  as  follows  : 

"  It  may  perhaps  be  of  further  interest  to  you  to  have  the  following  particu- 

1  The  total  of  export*  in  woollen  yarns  and          worsted  yarns          averaged 

From  1764-1770,  8,458  stones  170,038  stones 

"      1771-1777,  '.459      "  101,964 

(The  Irish  stone  is  16  Ibs.). 


22O  MONEY  AND  PRICES. 

Whatever  the  amount  of  wages,  the  output  was  de- 
pendent on  the  tools  employed  and  the  time  devoted  to 
the  work.  The  piece  rates  were  at  all  times  small.  But 
at  the  time  when  handwork  supplied  the  rising  demands 
of  an  expanding  trade  the  result  would  be  the  same — 
rather  a  rise  than  a  fall  in  pay,  concurrent  with  higher 
profits. 

Sir  Frederic  Eden,  in  1797,  speaks  of  a  rise  in  wages 
over  1787  in  all  employments  where  piece  rates  were  the 
mode  of  payment,  "  which,"  as  he  says,  "  ten  or  twelve 
years  ago  was  not  nearly  so  plentiful  as  at  present." 

larsof  actual  earnings  of  mule  spinners  at  a  well-appointed  Lancashire  cotton 
mill,  which  I  have  received  this  morning  in  response  to  an  inquiry. 
"  The  average  gross  earnings  of  all 

£       s.        d.  % 

The  spinners  are  per  week 3        12        n      =      17-85 

Less  paid  to  piecers i          6          6      =        6.37 


Net 2          6          5      =      11.48 

"  In  some  cases  the  net  earnings— deducting  the  same  rate  for  piecers — 
reached  £2  14*.  %d.  =  ($13.40)  per  week.  These  earnings  are  all  for  53^ 
hours  of  actual  spinning. 

"  On  ring  frames  the  average  earnings — for  girls — are  i8.f.  5</.  ($4.47)  per 
week." 

The  wages  for  ring  spinners  in  American  cotton  mills  are  about  85  cents 
a  day.  But  as  the  week  in  Massachusetts  is,  even  now,  after  the  late  reduc- 
tion of  the  working  time,  one  of  58  hours  or  10  per  cent,  more  than  the 
English  time,  the  wages  of  the  spinners  are  as  high  in  England  as  in 
American  mills  rated  on  working  hours. 

The  mule  spinners  in  America  earn  at  a  higher  rate  than  the  English  spin- 
ners. This  is  explained  by  the  fact  that  the  mule  spinners  have  no  piecers, 
but  employ  a  back-boy  between  two  of  them.  It  follows  that  the  spinner 
has  to  work  harder.  The  average  wages  for  spinners  in  the  King  Philip 
mill  are  given  me  by  Mr.  Robert  Howard,  the  Secretary  of  the  Mule  Spin- 
ners' Association,  at  Fall  River,  as  $15.00  gross — less  $2.00  for  the  backboy 
=  $13.00  net.  With  the  greater  exertion  necessary  on  account  of  the  ab- 
sence of  the  piecers  and  considering  the  longer  working  hours,  the  spinning 
in  Fall  River  ought  not  to  be  higher  than  in  Lancashire,  in  the  higher  num- 


WAGES  DEPEND   ON  OUTPUT. 


221 


A  reduction  in  the  rate  of  pay  could  occur  only  conse- 
quent upon  the  introduction  of  new  methods.  Adam 
Smith  does  not  yet  mention  any  of  the  improvements  in 
spinning  which  were  destined  to  revolutionize  the  textile 
industry,  and  with  it  the  industries  of  the  world.  Still, 
wages  had  risen  considerably  from  the  beginning  of  the 
century  to  his  time.  With  the  introduction  of  the  spin- 
ning machine  wages  rose  in  the  spinning  industry,  which 
became  a  factory  industry  thereby. 

bers  even.  And  this  is  practically  the  case,  as  I  had  occasion  to  find  out  by 
comparing  the  wage  lists  of  the  mule  spinners'  associations  as  then  in  force 
at  Fall  River,  Mass.,  and  at  Bolton  in  Lancashire.  The  prices  are  gauged 
on  the  number  of  spindles  in  the  mule  in  Lancashire.  In  Fall  River,  in  the 
lists  sent  to  me  by  Mr.  Howard,  the  prices  are  all  rated  on  720  spindles. 

Taking  the  same  number  of  spindle  rate  for  Bolton  I  find  the  numbers  to 
be  paid  at  the  following  price  per  pound  of  weft  yarn  spun  : 

MULE  SPINNERS'  PRICES  PAID  AT  FALL  RIVER,  MASS.,  AND  BOLTON,* 
ENGLAND,  PER  POUND  OF  WEFT  YARN. 


Yarn  number. 

Fall  River. 
Cents. 

Bolton. 
Cents. 

36 

1.17 

I.IO 

40 

1.368 

1.294 

48 

1.8 

1.614 

52 

1-944 

1.82 

60 

2-37 

2.256 

64 

2.56 

2.466 

72 

2-995 

2.966 

80 

356 

3-47< 

84 

3.805 

3-739 

92 

4-35« 

4.287 

96 

4.538 

4-47 

MO 

4.85 

4.86 

1  08 

S-346 

5-45 

116 

5647 

6.066 

no 

6.098 

6.38 

*  I  have  computed  the  English  penny  price  into  cents  and  the  Fall  River  price  which  is 
paid  per  1,000  hanks  in  the  pound,  so  as  to  get  to  an  even  basis. 


222 


MONEY  AND   PRICES. 


But  for  a  long  time  the  weaving  remained  a  house  in- 
dustry, and  what  is  here  to  the  point  was  in  the  time 
during  which  Ricardo  was  forming  his  views,  receiving  in- 
creased wages,  because  of  the  greater  demand  for  the 
piece  goods  and  the  freer  supply  of  yarn.  Before  the 
introduction  of  the  spinning  machine  the  weavers  could 
frequently  not  supply  the  goods  in  demand  for  the  want 
of  yarn.  Sir  Frederic  Eden,  Adam  Smith,  and  Arthur 
Young  give  the  rate  of  earnings  of  a  weaver  at  about  Ss.  ; 
in  1818,  the  time  of  Ricardo's  writings,  they  were  about 

IS*- 

Examples  from  the  Cotton  Industry. 

A  manufacturer,  Mr.  Houldsworth,  gave  before  a  parlia- 
mentary committee,  in  1837,  from  the  books  of  his  firm, 
the  wages  of  spinners  :  * 


Year. 

No. 

Mule  spinners. 
J.  d. 

Assistants. 
s.  d. 

j  804    

1  80 

•3,2  6 

27   6 

2OO 

•36  6 

•51   o 

1814  

1  80 

44  6 

27   6 

1814.. 

2OO 

60  o 

30  o 

These  high  rates  were  to  an  extent  counterbalanced  by 
the  prevailing  high  price  of  bread.  But  they  were  so  much 
in  excess  of  the  rates  in  vogue  before  the  introduction  of 
the  inventions,  referred  to,  that  a  mere  mention  of  this  fact 
would  show  the  error  of  the  generally  diffused  views. 

The  weekly  earnings  of  fine  yarn  spinners  at  Bolton 
were  given  to  me  in  1887  as  averaging  50^.  a  week,  and 
spinners  of  medium  numbers  at  Salford  told  me  that  they 
received  about  2  guineas  a  week.  But  505.  a  week  in  1887 
was  quite  a  different  thing  from  50^.  in  1814,  and  even  in 

*  Quoted  by  Thomas  Tooke,  History  of  Prices. 


THE  PROGRESS  IN  COTTON  MILLS. 


1818.  If  we  measure  the  value  of  money  in  these 
different  years  by  the  price  of  bread,  then  the  value  of 
wages  is  three  times  as  high  now  as  then,  in  the  time  of 
the  Napoleonic  wars.* 

But  with  the  rising  wages  a  constant  reduction  in  the 
cost  of  labor  had  gone  on,  and  consequently  a  reduction  in 
prices.  This  also  showed  itself  in  steady  progression  from 
the  beginning  of  the  century  to  the  present  day. 

The  price  of  No.  40  twist  per  pound  was  : 


1797 

1812 

1822 

1832 

1877 

Price  of  yarn  

s.  d. 
7   6 

s.  d. 
2    6 

s  .  d. 
I  4* 

d. 
Ill 

d. 

81 

Deducting  cotton,  in- 
cluding waste.  .  .  . 

3   4 

I  6 

9 

7i 

6 

Leaving    for  wages, 
expenses,  and  profits. 

4   2 

I    O 

7i 

4 

H 

*  Expressed  in  the  price  of  flour,  following  the  statement  from  the  wage- 
book  of  Thomas  Houldsworth,  Manchester,  and  adding  for  comparison 
present  earnings  computed  by  the  price  of  flour  of  to-day,  we  have  this  re- 
sult of  the  exertions  of  a  fine-yarn  spinner  in  the  progress  of  time  : 


Wages  of 
mule  spinners. 

Hours 
of  work 
per  week. 

Price  from 
Greenwich  Hos- 
pital records. 

Quantity  which 
a  week's  net 
earnings  would 
purchase. 

Average 
per  week. 

Flour  per  sack. 

1804.  .  . 

s.d. 
346" 
5* 
386 
466 

74 
74 
69 

53* 

t.  d. 

83 
70  6 

45 

20 

Ibs.  of  flour. 

121 

207 

»33 
652 

181?  .  . 

Low  prices  of  food  and  raiment  may  not  be  found  satisfactory  by  the 
classes  immediately  concerned  in  their  production  and  distribution,  but  the 
wage-earner  will  not  look  with  displeasure  upon  such  results  of  recent  de- 
velopment. If  he  and  the  farmer  do  not  get  all  they  are  entitled  to.  it  is 
due  to  the  appropriation  of  an  over-large  part  by  the  middleman,  reduced 
by  competition,  however,  to  smaller  and  smaller  proportions. 


224 


AND 


The  cost  of  labor  per  pound  and  the  average  of  wages 
earned  per  annum,  per  hand  employed,  is  given  by  Mr. 
Ellison  in  his  book  on  The  Cotton  Trade. 

Nothing  is  more  instructive  than  this  table  for  our 
purpose : 


Product  per 
head,  Ibs. 
of  yarn. 

Cost  of  labor 
per  Ib.  of 
yarn. 

Average 
earnings 
per  head. 

1819-1822  

068 

d. 
6.4 

£    *. 

26      13 

1829-1831  

I,C46 

4.2 

27       6 

1844-1846  

2  7S4 

2  3 

28       12 

1859—1861  

•5,671 

2.1 

72       1O 

1880-1882  

5,520 

I.q 

44       4 

We  find  the  same  results  in  the  weaving  industry.     Print 
cloth  shows : 


Weekly 
product, 
yards. 

Labor 
per 
yard. 

Weekly 
earnings 
per  weaver. 

l8l4.  . 

no.  7 

d. 
1.3 

s.      d. 

14    o 

1812.  .  .            

221.2 

.6 

12      O 

1890  j  3  looms  }  

.13 

17       2 

(  4  looms  ) 

22       5 

The  conditions  of  the  weavers  in  1832  were  deplorable. 
The  reduction  in  the  pay  was  in  consequence  of  great 
pressure  exercised  on  the  weavers  by  the  encroachment 
of  the  power  loom.  In  1890  we  see  the  labor  cost  re- 
duced to  about  one  fourth  that  of  1832,  the  wages 
increased  by  50  to  100  per  cent.,  and  the  cost  of  bread  re- 
duced to  less  than  one  half  the  old  price. 

Ellison  shows  about  the  same  progression  in  woven 
cotton  goods  as  in  the  yarns  : 


THE  COTTON  WEAVING  INDUSTRY. 


Year. 

Lbs.  product 
per  head. 

Cost  of 
Labor  per 
woven  Ib. 

Average 
of  yearly 
earnings. 

1819  —  1821  

-132 

d. 

TC  e 

£     d. 
2O   18 

1829  —  1831  

C2I 

o  O 

IQ    O8 

1844  —  1846  

I  658 

a  e 

2J    IO 

1859—1861  

7  2O6 

2  O 

•JO    IS 

1880  —  1882  

A  o^Q 

2  1. 

-1Q    OO 

We  see  by  this  illustration  that  there  is  no  connection 
whatever  of  the  rate  of  wages  and  the  cost  of  labor  in  the 
product.  The  cotton  industry  is  not  equalled  by  any  other 
in  importance.  No  other  industry  outside  of  agriculture 
employs  the  number  of  hands,  sets  so  many  wheels  in  motion 
and  has  exerted  such  an  influence  on  the  mental  develop- 
ment of  the  age.  No  other  is,  therefore,  so  well  adapted 
for  our  demonstration.  It  is  only  necessary  now  to  make 
a  few  comparisons  with  the  development  in  the  industry 
in  Germany  to  show  once  for  all  that  higher  wages  depend 
on  nothing  else  than  the  free  exercise  of  the  intellectual 
faculties  in  the  economy  of  production,  and  that  there  is 
nothing  more  detrimental  to  the  interests  of  the  employers 
themselves  than  the  application  in  practice  of  the  objec- 
tionable theories  referred  to. 

My  own  inquiries,  as  published  in  the  Consular  Reports 
of  the  State  Department  at  Washington,*  and  in  my  book 
The  Economy  of  High  Wages  have  lately  found  most  com- 
plete corroboration  in  the  work  of  an  eminent  German 
economist,  Dr.  von  Schultze-Gaevernitz,  Professor  of  Polit- 
ical Economy  at  the  University  of  Leipsig,  in  his  book, 
The  Factory  System  (Der  Grossbetricb)  as  an  Economic  and 

*  See  Consular  Reports,  No.  93,  on  the  cost  of  Manufacturing  Print  Cloth, 
also  the  Prefatory  Letter  to  the  Secretary  of  State  of  the  author  to  his  Re- 
port on  Industrial  Education  in  France. 


226*  MONEY  AND  PRICES. 

Social  Progress,  a  Study  in  the  Cotton  Industry.  (Leipsig, 
1892.)  The  relative  state  of  the  industry  in  England  and 
Germany  was  the  especial  object  of  his  examination. 

With  wages  not  more  than  one  half,  and  with  10  more 
working  hours  in  the  week,  he  finds  the  cost  of  direct 
labor  in  spinning  mills  a  fraction  higher  in  Germany  than 
in  England.  The  total  cost,  however,  is  considerably 
higher  on  account  of  the  many  overseers  and  other  auxili- 
aries employed  in  German  mills,  who  are  almost  entirely 
absent  in  English  mills. 

Everything  is  done  more  quickly  with  fewer  hands  in 
England  than  in  Germany. 

He  compares  the  efficiency  of  an  establishment  in  Mul- 
house  and  one  in  Oldham,  both  employing  self  actors ; 
the  Oldham  mill  with  70,000  spindles,  the  Mulhouse  mill 
with  32,000  spindles.  The  former  employs  167  hands,  the 
latter  185.  Oldham  has  2.4  and  Mulhouse  5.8  hands  per 
1000  spindles. 

The  number  of  yarn  is  363  to  403  in  Oldham,  2os  in  Mul- 
house. With  the  same  number  of  yarn  the  difference 
would  be  greater  yet. 

In  spinning  of  No.  405  twist  he  finds  the  number  of 
hands  employed  per  looo  spindles  to  be  2.3  for  Oldham 
and  6.2  for  Switzerland. 

In  the  weaving  the  cost  of  labor  is  higher  on  the  Conti- 
nent than  in  England,  in  England  higher  than  in  America, 
as  I  have  previously  stated  in  my  reports,  and  is  here  con- 
firmed by  Prof,  von  Gaevernitz.  The  number  of  looms 
tended  by  one  operator,  the  number  of  yards  of  the 
weekly  output,  make  the  rate  of  wages.  It  is  not  neces- 
sary to  recapitulate  the  statements,  the  matter  ought  for 
all  time  to  stand  as  res  adjudicata.  It  may,  however,  serve 
my  present  purpose  to  mention  the  case  of  the  hand-loom 


LOW  WAGES  AND   HIGH  COST.  22/ 

weavers  still  engaged  in  their  old  trades  and  homes,  earn- 
ing wages  not  higher  than  those  which  made  the  English 
weavers  of  200  years  ago  sing  out  their  plaintive  wails  as 
reported  to  us  by  Macauley  :  "  Six  pence  a  day ;  if  justice 
were  done  us,  a  weaver  would  earn  his  shilling  a  day." 

The  result  of  an  inquiry  published  in  1890  by  Dr.  Carl 
von  Rechenberg,  and  cited  by  Prof.  Brentano  in  his  new 
edition  of  his  Relations  of  Wages  and  Working  Time  to  the 
Product  of  Labor  refers  to  the  incomes  and  the  mode  of 
living  of  the  poor  hand-loom  weavers  of  Zittau.  Rechen- 
berg investigated  the  cases  of  28  families.  All  the  mem- 
bers of  a  family  work  together.  Outside  of  school-time 
the  children  are  engaged  in  spooling  ;  the  wife  assists  in 
the  weaving.  The  time  at  work  is  14  to  16  hours  in  win- 
ter and  13  to  15  hours  in  summer,  if  the  efforts  of  their 
feeble  frames  can  be  called  work.  The  incomes  from 
weaving  vary  between  three  and  seven  marks  per  week. 

It  is  surprising  to  learn  that  some  of  them  are  still  en- 
gaged in  weaving  shirtings  and  print-cloths.  Here  the 
daily  earnings  of  one  weaver  engaged  on  this  cloth  are 
given  as  low  as  37  pfennigs — about  9  cents  (almost  incred- 
ibly low)  with  a  product  of  about  8  yards  of  30  inches 
wide.  Several  other  cases  cited  have  earnings  per  day  of 
48  to  60  pfennigs — /'.  e.,  12  to  15  cents. 

Of  course,  it  is  an  uneven  struggle,  this  attempt  of 
keeping  up  the  contest,  in  countries  of  low  economic  de- 
velopment. But  low  as  the  earnings  are,  they  are  by  no 
means  so  very  much  different  from  those  ruling  in  the 
same  regions  in  the  good  old  times,  when  mechanical 
weaving  was  yet  unknown.  Dr.  Louis  Bein,  in  his  Indus- 
tries of  the  Voigtland  (Saxony),  gives  us  the  weekly  wages 
of  hand  weavers  and  machine  spinners  in  Plauen  and 
neighborhood.  They  are : 


228 


MONEY  AND   PRICES. 


Year. 


Weavers. 


1816 $0.76 

l8ig 0.93 

1827 0.75  to  $1-35 

1834 1.40 

1863 O.7O  to      2.IO 


Spinners. 

$r-75 

0.70  to  $1.40 


For  the  convenience  of  the  reader,  I  here  again  set 
down  the  earnings  of  the  English  spinners  and  weavers 
from  the  data  given  above  side  by  side  with  the  earnings 
of  these  contemporaneous  workers  in  one  of  the  earliest 
cotton  manufacturing  districts  of  Germany. 

AMOUNT  OF  WEEKLY  WAGES  OF  WEAVERS  AND  SPINNERS 

IN  PLAUEN  (SAXONY)  AND  LANCASHIRE,  ENGLAND, 

EXPRESSED  IN  AMERICAN  MONEY  : 


SAXONY. 
Weekly  Wages. 

LANCASHIRE. 
Weekly  Wages. 

Weavers. 

Machine 
Spinners. 

Weavers. 

Spinners. 

1804.  . 

$0.82  to  $1.00 
0.76  to    0.93 
1.40 

O.7O  tO      2.IO 

$1.40  tO  $2.10 

1.05  to    1.75 

2.IO  tO     2.40 

$2.0O 
1.86 
3-26f 

$7.40 

10  48 

8.37 
7-oof 

1810.  . 

1832  

1862*  

The  fine-yarn  spinner's  wages  may  be  reckoned  at  about 
25  per  cent,  above  the  average  of  mule-spinners'  wages  in 
England.  Even  with  this  allowance  made,  what  an  enor- 
mous difference  in  the  rate  of  wages  at  contemporary 
periods  between  the  two  countries.  § 

*  Power-looms. 

f  Women. 

\  The  average  rate  for  mule-spinners  ;  the  three  preceding  lines  in  the 
fourth  column  represent  only  fine-yarn  spinning  wages. 

§  The  German  rates  in  the  first  half  of  the  nineteenth  century  are  a  good 
way  below  the  wages  of  the  fifteenth  century,  expressed  in  the  same  money 
equivalents,  and  not  making  any  allowance  whatever  for  the  changed  value 
of  silver. 


THE  GERMAN  COTTON  INDUSTRY.  22g 

This  under-payment  of  the  spinners  and  weavers  of 
Plauen  and  the  Voigtland  against  English-men  and  women 
gives  its  true  showing  only  when  we  hear  the  story  of  the 
effect  of  English  competition  upon  the  industries  of  this 
poor  country  with  its  imputed  advantage  of  a  low  rate 
of  wages. 

At  the  time  of  the  Napoleonic  decrees  the  spinners  and 
weavers  were  comparatively  prosperous.  But  no  sooner 
were  the  ports  opened  to  English  yarns  and  manufac- 
tures, after  the  downfall  of  Napoleon,  and  the  demand  of 
the  world  following  a  return  of  peace  had  been  satisfied, 
than  the  wail  of  distress  is  heard.  The  markets  become 
glutted  with  the  cheaper  English  yarns  and  goods.  The 
104,964  spindles  running  in  1816  become  reduced  in  1817 
to  86,500  spindles.  The  time  of  12  hours  is  reduced  to 
6  hours. 

"  The  English  competition,  which  had  become  so  disastrous  upon  the 
(German)  fairs,  made  itself  equally  felt  in  the  direct  trade  from  home. 
Wherever  the  Voigtland  turned  with  its  manufactures  it  found  the  markets 
filled  with  English  cotton  goods.  Turkey,  which  had  become  during  the 
continental  embargo  a  chief  customer  of  England,  did  not  suffice  to  the  pow- 
erfully expanding  British  industry,  especially  as  there  were  in  Constantinople 
in  the  neighborhood  of  2000  looms  in  operation.  She  needed  new  fields  for 
export,  so  that  now  in  all  the  Mediterranean  ports,  closed  so  long  a  time, 
English  ships  entered  again.  From  now  on  the  English  flag  endeavored  to 
make  its  preponderance  felt  upon  all  the  seas,  and  English  commerce  began 
to  occupy  the  first  place  in  the  world.  Following  the  condition  of  things  in 
the  year  1814,  the  dealers  in  muslin  of  the  Voigtland,  who  had  their  con- 
signments in  Vienna  side  by  side  with  the  English  goods,  found  themselves 
constrained  to  take  their  unsalable  stocks  back  to  Plauen  and  seek  other 
markets  for  them,  though  the  expense  amounted  to  no  less  than  100  florins 
($40)  in  freight  and  duty  per  case."  * 

This  brief  quotation  suffices  to  illustrate  the  history  of 
the  trade  of  this  and  other  German  manufacturing  dis- 

*  Dr.  Louis  Bein,  Die  Industrie  des  t&chsischen  Voigtlandes. 


23O  MONEY  AND  PRICES. 

tricts  during  the  nineteenth  century  in  competition  with 
the  higher  paid  labor  of  England.  At  every  turn  of  the 
wheel  English  competition  threatens  to  break  down  the 
feeble  reed  upon  which  they  lean,  which  the  ignorance  of 
ages  has  been  extolling  as  a  staff  of  iron,  safe  at  all  times 
to  rest  upon. 

The  Bugbear  of  Indian  and  Japanese  Competition. 

It  has  of  late  become  the  fashion  to  raise  the  cry  of 
alarm  at  the  threatening  danger  from  Japanese  competi- 
tion in  the  manufacture  of  cotton  goods,  the  same  as  it 
was  for  some  years  previous  to  the  starting  of  Japanese 
mills  the  fashion  to  become  hysterical  at  the  sight  of  the 
expansion  of  the  Indian  trade.  The  fact  is  that  India 
spins  only  low  counts,  not  above  No.  20.  The  labor 
cost  in  these  numbers  is  very  small.  The  fall  in  the 
price  of  silver  only  affects  the  difference  in  the  labor  cost. 
The  cotton  is  the  same  to  the  Lancashire  spinner  as  to 
the  Bombay  spinner,  plus  the  freight  from  Bombay  to 
Manchester.  But,  on  the  other  hand,  coal  and  machinery, 
superintendence,  and  wear  and  tear,  are  higher  in  Bom- 
bay. The  advantages,  therefore,  are  limited,  and  consist 
in  the  difference  in  the  cost  of  labor,  and  in  the  saving  of 
the  freight  from  Bombay  to  Manchester  on  the  raw 
cotton,  and  of  the  freight  charges  from  Manchester  to 
Bombay  on  the  spun  yarn.*  But  allowing  all  that  is 
claimed,  the  mere  fact  that  only  the  lower  numbers  can 
be  spun  successfully  in  India,  where  the  cost  of  the  ma- 

*  A  statement  of  Mr.  T.  Comber,  of  Liverpool,  submitted  to  the  Royal 
Commission  on  Gold  and  Silver  in  1887,  shows  the  differences  on  which  the 
fall  of  exchange  would  operate  against  the  Lancashire  spinner  and  favor 
the  Bombay  spinner. 

The  number  of  yarn  is  No.  20.      The  rate  of  exchange  at  is.  $d.  per 


LOW  WAGES  NOT  ADVANTAGEOUS. 


231 


terial  stands  highest  and  the  labor  lowest  in  the  propor- 
tionate parts  of  the  cost,  contradicts  the  low-wage  theory 
totally.  In  anything  requiring  higher  proportions  of 
labor  the  English  hold  the  field.  This  is  the  same  in 

rupee,  about  30  per  cent,  discount,  gives  the  following  account  for  the  time 
the  statement  was  made. 

Comparison  between  cost  to  English  and  to  Bombay  spinners  of  produc- 
ing and  laying  down  in  Bombay  I  Ib.  of  2os   yarn  : 


Cost  to 

Advantage  to 

English 
Spinner. 

Indian 
Spinner. 

English 
Spinner. 

Indian 
Spinner. 

d. 
5-69 

•42 

.05 
i.  ii 

.28 
•4° 

d. 
5- 

.64 
.16 

•99 
.46 

•as 

d. 

.22 
.11 

.18 

d. 
•69 

.it 
•15 

Depreciation  and  interest  on  mill  and 

Coals  

Wages... 

7-95 
.50 

7-5° 

•5' 

.96 
•50 

Packing  and  carriage  to  Bombay  

8.45 

7.50 
Net  advantai 

•5' 

1.46 

•95 

It  takes  I  %  Ib.  of  cotton  to  spin  a  pound  of  yarn  from  Surat  cotton.  The 
.69  d.  for  freight  to  Lancashire  of  the  cotton  and  .50  for  freight  of  the  yarn 
express  the  natural  advantages  which  remain  to  the  Bombay  spinners  under 
all  possible  circumstances,  and  cannot  be  removed  whatever  the  rates  of  ex- 
change may  be.  The  other  advantages  are  of  very  small  significance  against 
this  great  factor,  and  are  more  than  counterbalanced  by  the  advantages  en- 
joyed by  the  Lancashire  manufacturer,  as  is  demonstrated  in  the  above  table. 

In  finer  numbers  the  advantages  are  reversed.  Surat  cotton  cannot  be 
spun  advantageously  in  higher  numbers  than  23*  or  2js.  American  cotton 
has  to  be  used  in  these,  and  the  freight  advantages  enjoyed  by  India  on  her 


232 


MONEY  AND  PRICES. 


Plauen  as  in  India,  in  Moscow,  or  in  Tokio.  The  Moscow 
spinner  is  not  more  enabled  to  compete  with  England  at 
home  on  account  of  his  depreciated  paper  rouble,  than 
the  Austrian  was  when  his  paper  florin  was  but  half  its 

own  cottons  become  lost  to  her.  Here  on  a  quasi-equal  footing  with 
England,  so  far  as  the  cost  of  the  raw-material  goes,  the  advantages  accruing 
to  her  from  the  low  value  of  the  rupee,  in  the  other  items  of  cost,  could  be 
put  to  a  test.  But  so  far  no  capitalist  has  yet  been  willing  to  take  advan- 
tage from  the  alluring  outlook,  presented  by  bi-metallists  and  free-coinage 
advocates.  Nor  does  British  trade  to  India  and  the  East  suffer  a  very  keen 
setback,  as  is  usually  proclaimed,  although  she  has  lost  her  trade  in  the 
coarser  yarn  numbers.  Excepting  years  of  depression,  the  trade  of  cotton- 
goods  has  been  expanding  ever  since  mills  were  started  in  India  in  about 
1872. 
A  list  of  exports  shows  this  : 

QUANTITIES  OF  COTTON  PIECE-GOODS  AND  COTTON  YARNS  SHIPPED 

TO  BRITISH  EAST-INDIA  AND  TO  CHINA,  JAPAN,  AND  TO 

DUTCH  EAST  INDIA  IN  THE  FOLLOWING  YEARS: 


Piece-Goods  in 
millions  of  yards. 

Yarns  in  millions  of 
Ibs. 

British 
East  India. 

China, 
Japan,  and 
Dutch 
East  India. 

British 
East  India. 

China, 
Japan,  and 
Dutch 
East  India. 

923 
i  295 
i  813 
i  791 

2  237 
2  196 
2  189 
I  964 

I  974 
i  981 

2  419 

478 
478 
632 
600 
620 

839 
806 
790 
765 
605 
670 

31 
35 
47 
49 
49 
57 
52 
53 
42 
40 
43 

20 

36 
46 
38 
26 
44 
38 
28 

31 
28 
25 

!878       

1880  

1884... 

!886  

j888  

1890  

1891  

1801  .  . 

1804.  .  . 

A  comparison  of  the  first  line  of  figures  (1870)  representing  the  time  before 
the  East-Indian  mills  were  started,  and  even  1878,  with  the  last  year's 
figures,  demonstrates  the  futility  of  the  arguments,  which  these  pages  have 
endeavored  to  controvert, 


LOW  WAGES  NOT  ADVANTAGEOUS.  233 

present  value  and  wages  were  as  low  as  they  are  now.  In 
Bohemia,  in  1884,*  in  one  of  two  cotton  factories  investi- 
gated by  Dr.  I.  Singer,  the  wages  ranged  from  40  cents  to 
$1.20  a  week  for  63  per  cent,  of  all  employed,  and  from 
$1.20  to  $2.00  for  the  remaining  37  per  cent.  In  the 
other  factory  the  earnings  were  higher,  that  being  a  better 
organized  mill.  Still  they  ranged  only  from  60  cents  to 
$1.80  for  62  per  cent.,  and  from  $1.80  to  $2.80  for  the  re- 
maining 38  per  cent.  The  highest  rate  in  mill  A  fls.  4  to 
fls.  5  ($1.60  to  $2.00),  was  earned  only  by  47  per  cent.  ; 
and  in  mill  B  the  highest  rate  fls.  6  to  fls.  7  ($2.40  to 
$2.80),  by  2.8  per  cent,  of  the  total  employed.  The  aver- 
age earnings  of  mill  A  were  $1.20  per  week,  /'.  e.,  20  cents 
per  day,  about  if  cents  per  working  hour  ;  and  in  mill  B 
$1.50  per  week,  i.  e.,  25  cents  per  day,  2^  cents  per  work- 
ing hour.  The  value  of  the  paper  florins  in  gold  was  then 
36  cents,  or  near  20  per  cent,  less  than  the  full  valued 
money  in  which  American  and  English  operatives  re- 
ceived their  wages,  higher  by  four  or  five  hundred  per 
cent,  than  these  pittances. 

It  is  barely  necessary  to  go  to  the  far  East  for  a  low 
rate  of  wages  paid  in  a  debased  coin  or  a  depreciated  cur- 
rency. We  find  the  Hindoo,  the  Chinese,  and  the  Japan- 
ese in  Europe.  They  are  found  in  the  south  and  the 
west  of  Ireland,  in  the  mountain  districts  of  Eastern  Ger- 
many to  the  Carpathian  mountains,  and  from  these  to  the 
Ural.  But  though  their  wages  are  almost  stagnant,  the 
wages  of  the  intellectually  advanced  industrial  nations 
have  been  all  the  time  rising  in  the  ratio  shown  above. 
Neither  the  depreciated  money  nor  the  low  rate  of  wages 
have  been  able  to  stop  the  triumphant  progress  of  the 

*  See  my  statement  in  The   Industrial  Situation,  G.    1'.    Putnam's  Sons, 
1885. 


234  MONEY  AND  PRICES. 

high-wage  countries  (America  and  England)  in  industry 
and  commerce.  The  ten-cent-a-day  wage  of  a  Hindoo 
spinner,  of  which  we  hear  so  much  as  the  cause  of  real  or 
simulated  apprehension,  has  risen  to  a  higher  figure  with 
his  increasing  efficiency.  But  let  us  offset  this  increase 
by  the  decline  in  the  rupee  value,  then  we  can  easily  find 
duplicates  in  the  far  more  muscular  individual  of  Northern 
Europe,  working  for  a  much  smaller  wage  than  this,  and 
too  anxious  to  have  a  ten  or  a  fifteen-cent  rate  a  day  for 
every  working  day  in  the  year. 

During  my  travels  in  Ireland,  in  Kerry  and  in  Donegal, 
I  found  women  and  girls  in  profusion  who  would  have 
been  only  too  happy  with  steady  earnings  at  sixpence  to 
a  shilling  a  week.  I  found  them  sitting  in  clusters  on 
the  road  or  walking  barefoot,  their  shoes,  with  their 
stockings  stuffed  in,  hung  over  their  arms  so  as  to  save 
the  wear  and  tear,  knitting  away  eagerly.  In  some  few 
places  offices  had  been  opened  by  London  people,  half 
for  charity  and  half  for  trade,  to  make  use  of  their  work 
and  find  some  employment  for  their  latent  talent.  The 
peasant  women  walk  fifteen  miles  to  Glenties,  where  two 
London  houses  have  opened  stores,  to  dispose  of  their 
finished  work  and  get  their  yarn.  For  long  worsted 
stockings  four  shillings  is  paid  a  dozen  pair.  It  takes 
all  an  expert  knitter's  time  to  finish  six  pair  in  a  week. 
The  men  tramp  in  gangs  of  ten  and  twenty  to  the 
nearest  port  to  cross  over  to  Scotland  to  bring  home 
three  or  four  pounds  as  the  net  results  of  their  labor  in 
harvest  work. 

Yet  England  does  not  avail  itself  of  this  cheap 
labor  begging  for  work  at  her  very  doors.  According 
to  a  Parliamentary  Return  of  1879,  there  were  only  1620 
persons  of  both  sexes  employed  in  the  cotton  industry 


THE  LOW  WAGES  OP  KUSSIA.  23$ 

in  Ireland,  while  England's  cotton  operatives  counted  up 
451,508  persons.  When  I  asked  after  this  industry  in 
1889,  I  was  informed  that  the  cotton  mills,  as  well  as 
many  of  the  woollen  mills,  had  been  forced  to  give  up 
as  they  could  not  compete  with  England. 

The  Low  Level  of  Russian  Wages. 

I  doubt  whether  any  examples  can  be  brought  from 
the  East  of  wages  that  are  lower  than  what  Russia  shows. 
I  have  before  me  " Landwirthschaft  und  Gewerbe  in  Mittel- 
Russland"  by  Alfons  Thun,  and  the  "Report  to  the  Rus- 
sian Government  of  the  Commissioners  to  the  American 
Exhibition  at  Chicago." 

Thun  describes  the  condition  of  the  peasantry  and  the 
trades  which  give  employment  to  this  great  multitude 
comprising  still  the  working  population  of  the  Empire. 
He  spent  a  number  of  years  in  the  middle  and  western 
provinces.  The  governments  of  Moscow,  Smolensk, 
Vladimir,  Nischni-Nowgorod,  St.  Petersburgh,  etc.,  were 
the  field  of  observation.  It  is  my  object  only  to  show  the 
miserable  pittances  at  which  the  European  sells  his  work, 
anxious  to  find  even  such  earnings,  of  which  we  shall  here 
give  a  few  instances.  At  the  opening  of  navigation  a  very 
active  time  sets  in  in  the  shipping  trade.  Vessels  are 
to  be  loaded  and  unloaded,  taken  down  the  river,  helped 
over  bad  places  in  the  river  bed.  Frequently  a  vessel 
gets  stuck,  and  the  cargo  has  to  be  transferred  to  an- 
other boat.  It  is  a  hard  time  for  the  poor  peasant,  who 
by  such  arduous  toil  hopes  to  earn  and  take  home  a 
sum  of  money  with  which  to  pay  at  least  some  of  the 
expense  necessary  to  tide  over  to  the  next  harvest,  or  to 
pay  off  some  of  the  dues  and  arrears  hanging  heavily  over 
him.  Thun  gives  the  following  statement  as  to  these 


236  MONEY  AND  PRICES. 

earnings:  From  1571  contracts  made  in  1875,  in  the  dis- 
trict of  Orlow,  it  appears  that  a  workingman  averages 
13.88  roubles  in  money,  and  3  roubles  in  provisions  for 
three  months,  or  18  kopecks  (12^  cents)  a  day.  He  re- 
ceives from  6^-  to  8£  roubles,  money  down  to  bind  the 
bargain,  which,  of  course,  is  included  in  the  total  stated. 
This  is  about  the  only  money  that  he  can  call  earned. 
The  balance,  partly,  has  to  defray  various  expenses  of  his 
own  and  partly  to  remunerate  the  headman  of  the  artel 
and  the  leader  of  the  gang,  who  procured  him  the  job. 

The  raftsmen  on  the  Dnieper  earn  about  35  kopecks 
(25  cents)  a  day. 

Carpenters  and  builders  hire  themselves  out  to  con- 
tractors in  artels  of  eight  to  fifteen  men.  The  province 
of  Waetka  is  especially  famed  for  its  carpenters  and  build- 
ers, whose  number  is  given  at  the  high  figure  of  10,000. 
They  go  to  great  distances  under  the  charge  of  contractors. 
They  are  found  by  the  contractors.  The  earnings  are 
given  for  the  Orlow  district  as  ranging  from  30  to  95  roubles 
for  nine  months.  (From  8  to  27  cents  a  working  day.) 

Four  hundred  and  eighty-nine  contracts  for  another 
district,  that  of  Urschum,  divide  the  earnings  as  follows : 

7j  per  cent.,  IOO  to  160  roubles  ($70  to  $112.) 
29  71  "  loo  "  (  50  "  70.) 

35  50  "  70  "  (  35  "  49-) 

23  3i  "  50  (  21.70"  35.) 

5  15  "     30  (  10.50  "       2i.) 

Five  eighths  of  the  number,  earn  less  than  $50  for  the 
period  of  work,  /.  e.,  nine  months. 

Brickmakers  by  machinery  or  hand  in  the  district  of 
Moscow,  at  the  time  of  great  speculative  movement  in 
the  building  trade,  earned  in  three  months  from  75  to  87 
roubles  (without  board),  i.  e.,  about  70  to  78  cents  a  day. 


RUSSIA'S  WANDERING  WORKMEN.  237 

The  average  for  other  governments  is  about  half  a 
rouble=35  cents.  Laborers  at  the  brick-works  for  the 
season  (five  to  six  months)  55  to  70  roubles  (27  cents  a 
day)  in  the  Moscow  district. 

I  illustrate  some  of  the  leading  trades  only  which  em- 
ploy large  numbers  on  full  time,  at  least  as  long  as  the 
season  lasts.  I  omit  the  many  occupations  which  we 
class  as  house-industries,  and  wherein  earnings  cannot 
very  well  be  gauged  on  a  time  basis.  We  can  estimate 
from  the  earnings  quoted  for  occupations  requiring  an 
uncommon  amount  of  endurance  and  strength,  as  well 
as  considerable  skill,  the  standard  of  wages  in  the  lighter 
industrial  employments. 

But  as  these  wages  relate  to  a  period  of  some  twenty 
years  ago,  and  twenty  years,  it  may  be  said,  contain  the 
possibility  of  great  changes  in  these  rapidly  moving  times, 
we  can  here  take  up  the  thread  spun  for  us  by  the  Rus- 
sian Government  itself  in  the  Report  of  the  Department 
of  Agriculture  of  the  Ministry  of  Crown  Domains  for 
the  World's  Columbian  Exposition  held  in  Chicago,  in 
1893. 

I  will  give  a  few  extracts  from  this  very  elaborate  and 
highly  instructive  report,  touching  only  upon  some  of 
the  chief  employments  of  the  agricultural  classes,  which, 
be  it  remembered,  are  mainly  the  working  classes  of 
Russia. 

Starting  with  cooperage  and  wood  industry  barrels, 
tubs,  carts  and  sledges  are  made  in  the  villages.  About 
24,000  families  are  occupied.  A  workman  earns  about  30 
to  40  kopecks  (21  to  28  cents)  a  day. 

Cabinet-making  gives  occupation  to  about  10,000  peas- 
ant families.  Some  masters  employ  hired  workmen,  who 
get  40  to  50  roubles  (28  to  35  dollars)  per  year  (with  board), 


238  MONEY  AND  PRICES. 

according  to  skill.  Working  time  13  to  14  hours  a  day. 
The  profit  of  the  master  is  90  to  100  roubles  a  year. 

Village  locksmiths  earn  about  2  roubles  ($1.40)  a  week, 
and  the  most  skilful  only  5  roubles.  The  wares  are 
generally  sold  to  middlemen,  who  spread  them  throughout 
the  Empire  and  to  countries  in  Asia  beyond  the  Russian 
domain. 

In  pottery  an  average  potter  makes  a  cartload  of  pots  a 
week,  which  he  carries  to  the  neighboring  fairs  or  bazaars 
for  sale.  The  price  per  cartload  varies  according  to  the 
season  from  2.50  to  3.50  roubles,  this  being  the  total  weekly 
earnings  of  a  potter  out  of  which  the  cost  of  the  fuel  and 
sometimes  that  of  clay,  not  unfrequently  bought,  have  to 
be  deducted.  Thus  a  potter  earns  no  more  than  from  2  to 
3  roubles  per  week.  Spinning  is  still  done  on  spindles — 
the  wheel  is  not  known.  A  good  weaver,  man  or  woman, 
can  make  a  piece  of  linen  50  arshines  (28  inches)  long,  a 
week,  and  can  earn  in  the  working  season  from  70  to  100 
roubles. 

Cotton  weavers  work  at  their  homes  or  in  small  factories 
where  from  10  to  20  looms  are  placed.  The  warp  and  the 
weft,  both  machine  made,  are  received  by  the  peasants 
from  the  manufactories  through  the  intermediation  of 
commissioners  found  in  the  linen  cloth  industry ;  the 
goods  are  forwarded  to  the  orderers  as  soon  as  they  are 
finished.  In  the  cotton  weaving  an  ordinary  weaver  re- 
ceiving from  1.5  to  2.5  kopecks  per  arshine  of  tissue 
(1.05  cents  to  1.75  cents  per  arshine,  or  1.35  to  2.25 
cents  per  yard),  earns  during  the  winter  not  more  than  15 
roubles ;  good  workmen  earn  from  40  to  50  roubles. 
In  the  government  of  Saratov,  where  the  Sarpinka  is 
mainly  worked,  weavers  earn  from  33  to  45  kopecks  per 
day  or  from  50  to  60  roubles  per  year. 


By  comparing  these  rates  with  those  stated  by  Mr. 
Thun,  it  will  be  seen  that  labor  could  be  hired  as  cheaply 
in  1893  as  in  1873  in  the  dominions  of  the  Czar.* 

In  addition  to  this  advantage  of  a  very  low  wage-rate, 
Russia  has  had  all  along  and  still  enjoys  the  advantage  of 
a  depreciated  silver  rouble,  and  up  to  recent  years  an  even 
more  depreciated  paper  currency.  Wages  are  paid  in  this 
latter  rouble,  as  it  is  about  the  only  money  in  circulation. 

"  For  budget  purposes  the  official  value  in  1891  was  1.60  paper  to  i  silver 
rouble,  or  22.43^.  (44.86  cents)."  f  (The  value  of  the  gold  rouble  is  70  cents.) 

If  we  compute  the  wages  given  above  at  this  rate  of  ex- 
change— as  of  course  we  have  to  do  for  this  comparison — 
then  I  doubt  whether  there  is  much  to  choose  in  the 
standard  of  wages,  and  in  the  advantages  which  a  de- 
based currency  is  said  to  give  to  a  country's  industries, 
between  Russia  on  the  one  hand  and  India  and  Japan  on 
the  other.  If  these  are  advantages,  then  Russia  would 
not  need  great  armaments  and  vast  plans  of  conquest  to 

*  I  have  frequently  shown  that  low  wages  are  always  found  in  countries  of 
undeveloped  economic  conditions  and  advance  with  the  progress  to  a  higher 
stage  of  development. 

An  interesting  proof  I  found  recently  in  an  address  by  Alfred  Krupp,  the 
father  of  the  present  owner,  to  his  workmen,  who  had  asked  for  an  increase 
of  wages.  I  will  not  repeat  the  self-complacent  speech  in  which  he  details 
the  part  of  benefactor  he  played  in  the  early  critical  years  of  the  works. 
The  significant  part  is  his  own  statement  that  in  about  1827  smiths  and 
casters  were  given  then,  after  a  rise  in  wages  had  been  granted  by  this 
earthly  Providence,  one  thaler  and  fifteen  silber-groschen  (one  dollar  and 
five  cents,  =  sixteen  and  one  half  cents  a  day).  Mr.  Krupp  was  of  opinion 
that  the  higher  wages  paid  in  1870  were  due  to  his  generosity,  and  not  in 
obedience  to  a  general  economic  law.  How  far  this  rate  of  wages  falls  be- 
hind mediaeval  wages,  ruling  in  the  same  neighborhood,  can  be  seen  by 
consulting  Table  II.  of  the  Xanten  price  records  of  the  preceding  chapter. 

f  The  Statesman's  Year-book,  1894. 


240  MONEY  AND  PRICES. 

revenge  herself  on  England.  All  it  would  require  would 
be  to  set  her  millions  to  work  at  wages  one  third  to  one 
fifth  those  of  England,  and  further  reduced  some  40  per 
cent,  through  a  depreciated  currency,  and  thus  destroy  the 
commercial  and  industrial  greatness  of  the  Island  Empire 
at  one  sweep. 

Comparing  Output  of  Labor. 

Very  interesting  results  are  derived  from  a  comparison 
of  the  output  of  different  countries  working  under  such 
different  rates  of  wages  in  the  same  industrial  employ- 
ments, and  of  the  cost  per  piece  in  the  same  fabrics. 
We  have  noted  above  the  cost  of  spinning  fine  yarns  in 
Alsace,  England,  and  America. 

Like  effects  appear  in  weaving.  We  have  mentioned 
the  cost  per  yard  and  daily  output  of  hand-loom  weavers 
in  Zittau  and  the  labor  cost  of  weaving  cotton  cloth  in 
Russia.  The  output  of  a  hand-loom  weaver  in  Zittau  is 
about  nine  to  ten  yards  of  cloth  thirty  inches  wide,  at  a 
labor  cost  of  about  one  and  a  quarter  cents  per  yard. 

In  Russia  we  find  a  cost  of  i^  to  2^-  cents  per  yard  of 
weaving  according  to  fineness.  Reducing  the  paper  rouble 
to  a  gold  basis,  the  average  would  remain  the  same  as  in 
the  Zittau  example.  The  lower  rate  in  the  Russian 
account  is  undoubtedly  on  a  coarser  kind  than  the  one  in 
Zittau.  The  weekly  output  here  is  about  sixty  yards. 
The  average  output  per  loom  per  week  in  Burnley, 
Lancashire,  in  cloth  of  the  same  width  is  about  two 
hundred  yards.  But  as  a  good  single  weaver  runs  four 
looms  in  Burnley,  and  in  Fall  River  and  Lowell  six  to 
eight,  the  output  is  from  eight  to  twenty-two  times  as 
great  as  in  these  low-wage  countries.  I  found  the  com- 
plete cost  of  labor  and  expense  of  weaving  and  finishing, 


SMALL   OUTPUT. 


241 


including  general  expense  (which  has  to  be  counted  in  as 
an  offset  against  hand-loom  weaving  where  the  weaver 
returns  the  finished  cloth  against  the  yarn  received),  to  be 
in  Burnley  6.182  cents  and  in  Lowell  5.071  cents  per 
seven  yards,  =  0.883  an^  0.724  cents  per  yard,  or  about 
one  half  the  cost  at  which  the  poor  hand-loom  weavers 
keep  up  the  struggle  for  existence. 

But  the  difference  between  hand-loom  weaving  and 
power-loom  weaving  shows  no  less  pregnant  variations 
when  we  compare  earnings,  output  and  labor  cost  in 
power-loom  weaving  in  the  different  countries  which  now 
are  engaged  in  industrial  competition.  It  is  always  the 
low-wage  country  which  comes  out  second  in  the  race,  i.  e., 
where  the  people  toil  the  longest  number  of  hours  and 
produce  at  highest  cost. 

Von  Schultze-Gaevernitz  in  speaking  of  the  relative  pro- 
ductiveness of  labor  and  its  effect  on  wages  and  labor  cost 
says: 

"  I  confine  myself  here  to  the  following  example,  which  rests  on  state- 
ments of  Schoenhof,  which  were  corroborated  to  me  in  Lancashire.  It  relates 
to  print-cloth  64  x6.j. 


Weekly  pro- 
duct per 
weaver. 

Cost  of 
labor  per 
yard. 

Working 
hours 
day. 

Weekly 
earnings. 

$    '. 

Yardt. 

466 
466 
700 
I2OO 

O.6o6 
O.6o6 
0.55 
0.4 

12 
12 

9 
10 

2.74 
2.67 

3.90 
5.10 

Professor  von  Schultze  took  these  figures  from  a 
pamphlet  Influences  Bearing  on  Production  published 
by  the  State  Department  in  Washington  in  1888. 


This 


16 


242  MONE  Y  AND  PRICES. 

formed  part  of  my  report  on  Industrial  Education  in 
France.  I  gave  there,  in  brief  outline,  the  general  indus- 
trial situation  as  I  found  it  from  my  travels  and  observa- 
tions made  in  1887. 

The  wide  scope  of  my  commission  and  the  brief  time  at 
my  disposal  made  it  necessary  to  go  quickly  over  a  vast 
field,  and  leave  for  another  opportunity  a  closer  examina- 
tion of  very  important  detail.  I  took  up  in  1888  the  ex- 
amination of  manufacturing  cost  in  different  countries  of 
textiles,  iron,  and  steel  and  other  industrial  products. 
Print  cloth  was  one  of  the  first  items  of  my  inquiries.  The 
data  for  America,  Switzerland,  and  Germany  were  taken 
from  mill  accounts  by  me.  The  English  rate  was  obtained 
for  me  by  friends,  themselves  large  manufacturers  in  Lan- 
cashire, but  not  making  this  particular  kind  of  print  cloth 
in  their  own  mills.  Not  satisfied  with  any  information 
not  obtained  by  personal  inquiry  on  the  spot,  and  from 
the  mill  accounts,  I  visited  Burnley,  the  chief  seat  of  print 
cloth-making  for  Lancashire  the  same  as  Fall  River  for 
America.  There  I  obtained  exact  figures  from  the 
work  accounts,  which  I  made  the  subject  of  my  report 
to  the  State  Department  "  On  the  Cost  of  Manufacturing 
Print  Cloth  in  Massachusetts,  Lancashire,  and  Switzer- 
land." *  The  price  paid  in  Burnley  at  the  time  was  25| 
cents  per  50  yards,  i.  e.,  51  cents  per  hundred  yards.  The 
statement  given  above  has  to  be  corrected  to  that  extent. 

Last  summer,  having  to  deal  with  these  questions  in 
Washington  in  connection  with  the  tariff  legislation  then 
pending,  I  wrote  to  England  for  information  as  to  changes 
made  since  1888  in  the  piece  rates  paid  to  operatives. 

I  received  the  following  answer  from  one  of  the  princi- 
pal concerns : 

*  See  Consular  Reports  of  the  United  States,  No.  93,  May,  1888. 


LATEST  COMPARISONS  OF  LABOR   COST.  243 

"  Below  we  give  a  few  examples.  We  rise  or  fall  \  d  per  pick  and  \  d 
for  each  4  inches  in  width  per  piece  of  24  yards.  For  instance  : 

28  inch,  16  x  16  (American,  64  x  64)  5}  d  —  44  cents  per  100  yards. 
32     "  "  "         5f"      48     " 

28  18  x  18  (American,  72  x  72)  6f  "        56     " 

32     "          "  "         7;."       60     " 

36     '  7f"       64 

This  is  a  considerable  reduction  since  1888.  But  the 
American  price  has  also  been  reduced  to  such  an  extent 
that  the  difference  is  still  nearly  as  great  as  I  found  it  in 
1888  between  America  and  Lancashire.  In  answer  to  an 
inquiry,  I  received  this  reply  from  my  friend,  Mr.  Robert 
Howard,  the  Secretary  of  the  Fall  River  Cotton  Mule 
Spinners'  Association  : 

"  In  reply,  etc.,  I  will  inform  you  that  the  price  for  weaving  64x64  regu- 
lar print  cloth  (28  inches  wide)  in  Fall  River  is  16  cents  per  cut  of  45  yards." 

This  is  equal  to  36  cents  per  100  yards  against  Burnley, 
Lancashire,  44  cents  per  100  yards.  Hence  the  American 
weaver  gets  8  cents  less  pay  for  weaving  a  hundred  yards 
of  cloth  than  the  English  weaver,  although  the  American 
earns  from  25  to  33  per  cent,  more  wages.  This  is  made 
possible,  as  has  been  explained,  by  the  American  weavers 
attending  nearly  twice  as  many  looms  as  the  English. 
English  wages  are  so  much  higher,  and  English  labor  is 
so  much  cheaper  than  Continental  for  the  very  same 
reason.  In  the  light  of  such  facts,  it  must  always  remain 
an  amusing  spectacle  to  see  the  American  cotton  manu- 
facturer become  excited  and  threaten  to  close  his  mills 
when  a  reduction  is  suggested  of  a  60  tariff  to  a  40  per 
cent,  basis. 

Examples  from  Other  Industries. 

Similar  examples  can  be  supplied  ad  infinitum.  I  will 
give  two,  collars  and  cuffs  and  white  shirts.  These  two 


244  MONEY  AND  PRICES. 

items  were  very  important  factors  in  the  legislative  history 
of  1894,  and  deserve  brief  illustration.  I  am  also  here 
possessed  of  the  facts  through  personal  investigation. 

In  1887  I  obtained  in  Berlin  the  cost  of  manufacturing 
these  articles  from  the  leading  firm  there,  which  is  also  a 
large  exporter  to  America.  Before  making  use  of  the 
data  then  obtained,  I  procured  in  1894  a  statement  of  the 
firm's  present  manufacturing  cost  through  their  selling 
agent  at  New  York,  who  wrote  for  it  to  his  firm  for  pre- 
sentation of  the  facts  to  the  Committee  on  Ways  and 
Means. 

I  found  these  figures  to  be  the  same  as  those  given  to 
me  in  Berlin.  Little  had  changed  in  the  seven  years. 
The  American  figures  are  those  submitted  by  the  collar 
manufacturers  (or  rather  by  the  foreman  of  one  of  the 
firms)  to  the  Ways  and  Means  Committee.  The  correct- 
ness of  the  figures  was  corroborated  to  me  by  leading 
manufacturers. 

Without  entering  into  detail,  I  state  here  the  labor  cost 
for  making  a  dozen  linen  collars  in  Berlin  and  in  Troy  : 

COST  OF    MAKING  A  DOZEN   LINEN  COLLARS. 

Berlin.  Troy. 

Pfennigc.       Cents.  Cents. 

Cutting 7.50  1.78  ) 

Cutting  button-holes 2.50  .60  ) 

Machine  sewing,  turning,  banding,  etc.  .  72.50  18.00                          21.00 

Button-holing 33. oo  8.00                           2.88 

Laundry  and  ironing 60.00  15.00                         13.00 

174.50       43.38  38.38 

The  cost  is  higher  in  Berlin  than  in  Troy.  The  button- 
holes in  the  Berlin  collars  are  hand-made,  though  of  a 
rather  inferior  kind.  The  button-holes  in  the  American 
collars  are  machine-made.  If  we  allow  the  five  cents  to 
equalize  this  difference  to  the  credit  of  the  Berlin  collars, 


OTHER  FACTORY  PRODUCTS  COMPARED.          245 

then  the  cost  is  exactly  alike.  Yet  the  time  wages  of 
collar  -  makers,  laundresses,  and  cloth  -  cutters  are  fully 
double  what  they  are  in  this  very  well-equipped  factory 
in  Berlin,  which  I  found  to  be  paying  higher  wages  than 
is  the  ordinary  rate  for  like  work. 

In  shirts  with  linen  fronts  I  found  the  same  conditions 
and  facts,  of  which  I  will  also  here  give  the  comparative 
figures  : 

COST  OF  MANUFACTURING  ONE  DOZEN  SHIRTS  IN  BERLIN 
AND  IN  NEW  YORK.* 

Berlin.  New  York. 

Pfennige.      Cents.  Cents. 

Cutting 100  23                        18  to  20 

Making  shirt 355  84.50  ) 

Making  holders 30  7.00  f 

Stamping  sizes 5  1.25                          f 

Making  button-holes 130  30.85                          25 

Washing  and  ironing 360  85.75                       1.25 

$2.33.15  $2.70 

The  difference  is  trifling.  The  cost  of  laundrying  is 
higher  in  the  New  York  statement  because  shirts  are 
laundried  by  steam  laundries.  The  cost  statement  for 
New  York,  therefore,  includes  an  extra  profit  and  sepa- 
rate expense.  The  Berlin  amount  covers  the  mere  labor 
outlay  for  washing  and  ironing  only,  which  being  done  in 
the  factory  carries  all  extra  charges  over  to  expense  and 
profit  and  loss  account. 

We  have  the  proof  here  so  full  and  so  complete  of  the 
confusion  of  ideas  resulting  from  confounding  wages  and 
cost  of  labor  that  little  needs  to  be  added  in  illustration. 
The  low  labor  rate  by  the  piece  follows  the  industrial 
progress,  the  intellectual  and  material  development  of  the 
age.  The  rate  of  wages  keeps  in  a  progressive  ratio  with 

*  For  New  York  statement  obtained  from  leading  shirt  houses, 
f  Part  of  cutting  expense. 


246 


MONEY  AND  PRICES. 


this  development.  If  in  the  treatment  of  the  question  of 
wages  we  had  separated  it  and  dealt  with  the  piece  rates 
when  we  meant  to  determine  the  cost  of  labor  and  the 
competitive  positions  secured  thereby,  we  should  have 
come  nearer  to  the  facts  and  to  a  mutual  understanding, 
though  we  might  have  seen  fewer  learned  treatises  on  the 
principles  of  economic  science. 

The  extent  to  which  this  paying  by  the  piece  is  carried 
in  manufacturing  industries  is  seen  from  a  statement  re- 
lating to  the  working  force  of  a  cotton  weaving  mill  in 
North  Lancaster,  which  is  as  applicable  to  America  as  it 
is  to  textile  manufacturing  in  general. 

The  225  hands  employed  in  the  mill  divide : 


In  piece  rates. 

In  weekly  rates. 

Spooling  

16 

Beaming  

2 

Sizincr   . 

I 

Dressing  

e 

\Varping  

5 

\Veaving  

180 

Overseers  

*6 

Cloth  examiner  

I 

Laborers  

•i 

Others  

6 

Totals  

2OQ 

T6 

The  Progress  in  Metallurgy. 

The  progress  in  the  technical  development  in  the  iron- 
and  coal-mining  industries  shows  the  same  general  results. 
The  lowest  labor  cost  goes  hand  in  hand  with  the  short- 
est hours  and  the  highest  wages,  and  the  price  declines 
in  conformity.  In  mining  and  in  many  branches  of  the 

*  Paid  at  the  rate  of  is.   $d  to  the  £.  of  the  weavers  under  their  supervision. 


THE  LOW  COST  OF  IRON  MAKING.  247 

iron  and  steel  industry  the  men  are  paid  by  the  tonnage 
handling.  Of  course,  where,  as  in  pig-iron,  the  labor  pro- 
cesses are  mainly  manual,  like  the  handling  and  barrow- 
ing  of  the  ores  and  fuel,  the  labor  cost  is  influenced  by 
the  higher  wages.  But  even  this  is  not  carried  to  the  ex- 
tent that  the  higher  wages  make  equally  high  cost.  It  is 
a  demonstrated  fact  that  English  iron  is  produced  as 
cheaply,  as  far  as  the  furnace  labor  goes,  as  German  iron, 
although  English  wages  are  higher  by  at  least  one  third. 
The  better  feeding  and  living  of  the  Englishman  fully 
make  up  for  the  difference,  on  a  footing  of  equally  im- 
proved plant,  in  increased  efficiency. 

A  particularly  low  cost  of  labor  in  pig-iron  making,  con- 
sidering the  nature  of  the  ores,  has  been  supplied  to  me 
from  the  working  accounts  of  the  Tennessee  Coal  and 
Iron  Company.  The  account  relates  to  the  output  of 
three  furnaces  for  the  month  of  September,  1894.  It 
shows  a  total  labor  cost  per  ton  of  iron  of  78.6  cents.  This 
includes  all  labor  items  at  and  around  the  furnace,  and 
salaries  and  office  expense  connected  with  the  works. 
The  cost  in  England,  covering  the  same  items,  of  iron 
requiring,  however,  a  somewhat  smaller  tonnage  handling 
of  ores,  I  found  at  Middleborough,  to  be  3^  =  73  cents, 
and  the  same  at  the  Duke  of  Sutherland's  furnaces  in 
Staffordshire. 

In  both  the  English  accounts  the  ore  is  a  50  per  cent, 
ore,  while  in  the  American  account  a  40  per  cent,  average 
appears.  Making  allowance  for  the  difference  in  labor 
arising  therefrom,  the  cost  in  either  case  comes  to  about 
the  same  rate  per  ton  of  finished  iron. 

In  America  we  produce  the  ore,  the  coal,  and  the  coke 
cheaper  than  in  England  (and  England  does  it  cheaper 
than  Germany),  although  the  daily  wages  are  higher.  The 


248 


MONEY  AND  PRICES. 


beds  are  deeper  in  like  kinds  of  ores  and  coals,  therefore 
easier  workable.  But  on  the  whole  the  higher  rate  of 
wages,  the  higher  standard  of  living,  ruling  here,  causes 
a  more  thorough  working  organization  than  elsewhere. 
The  application  of  labor-saving  machinery  and  appliances 
is  carried  to  an  extent  in  the  mining  and  metallurgical 
industries  unknown  in  countries  where  a  lower  rate  of 
wages  prevails. 

The  costliness  of  these  alone  is  a  bar  to  their  introduc- 
tion except  under  conditions  as  ruling  in  America.  With 
the  progressing  application  of  these  methods  the  rates  of 
labor  by  the  piece  (the  ton)  have  fallen,  the  earnings  have 
risen.  We  need  only  refer  to  the  census  returns  of  bitu- 
minous coal  mining  where  1890  shows  this  progressively 
over  1880,  as  1880  shows  it  over  1870. 


Cost  of  labor 
per  ton. 

Yearly  earnings 
per  head. 

Value  per  ton 
at  the  mine. 

1880. 

1890. 

1880. 

1890. 

1880. 

1890. 

Kentucky  

73 
72 
86 
99 
65 

70 
60 
69 
69 
63 

$26l 

295 
320 

382 

337 

$334 
39  1 
352 
357 
39i 

$1.20 
1.  2O 
1.29 

1.44 

1.02^ 

ggc. 

82C. 

940. 
970. 
85ic. 

West  Virginia  

Ohio   

Illinois  

Pennsylvania  

Iron-ore  mining  shows  for  Michigan,  where  nearly  all 
the  Bessemer  ores  were  mined  : 

1880.          1890. 

Labor  cost $1.40  $1.19 

Earnings 413.00         535-OO 

The  recent  developments  in  the  Mesaba  range  in 
Minnesota  in  iron-ore  mining  are  familiar  to  the  reader. 
Inexhaustible  stores  of  a  superior  kind  of  ore  have  been 
found.  Being  surface  ores  they  need  no  sinking  of  costly 


REDUCTION  OF  MINING  COST. 


249 


shafts,  no  laborious  and  expensive  mining  operations  to 
bring  them  forth.  They  are  put  on  board  cars  by  means 
of  steam  shovels  at  a  total  labor  cost  of  6  to  7  cents  a  ton. 
The  ores  are  laid  down  at  Pittsburgh  furnaces  now  at  less 
than  one  half  the  cost  of  three  years  ago.  Bessemer  iron 
can  be  produced  at  a  cost  of  $9.50  a  ton,  which  cost  $16 
to  $17  some  six  or  seven  years  ago  at  the  same  furnaces> 
from  no  other  cause  than  this  cheapening  of  the  supplies. 
The  day-rate  of  wages  has  not  changed  either  at  the  fur- 
naces or  at  the  mines. 

The  cheapening  of  production  by  scientific  progress  is 
nowhere  else  so  apparent  as  in  metallurgy.  This  applies 
to  mining  operations  in  all  the  branches.  The  laborer's 
lot  is  made  less  arduous,  the  dangers  become  more  circum- 
scribed, and  his  pay  advances  with  the  progress  that 
cheapens  his  product  to  a  point  at  which  the  labor  cost 
is  but  a  nominal  charge,  compared  to  former  times. 

A  very  graphic  illustration  of  this  has  lately  been 
printed  by  the  Iron  Age,  from  the  records  of  the  Quincy 
copper  mine  on  Lake  Superior.  They  cover  a  period  of 
forty  years.  I  take  the  statement  in  full  from  the  pages 
of  the  Iron  Age : 

"  The  following  table  shows  the  product  for  a  series  of  years,  together  with 
the  yield  of  the  rock,  in  ingot  copper,  and  the  cost  of  production  : 


Year. 

Product. 
Pounds  ingot. 

Yield  per  cubic 
fathom. 
Pound*  copper. 

Cost  per  pound. 
Cents. 

,864  

2,498,574 

562 

'  26.71 

5*8 

14.90 

2,798,300 

485 

15.79 

jgjS                 

2,868,500 

397 

14.01 

j88t                  

767 

10.03 

,885  ...         

5,848.530 

710 

7.50 

769 

6.51 

584 

5.68 

250 


MONE  Y  AND  PRICES. 


"  It  will  be  observed  that  the  yield  in  1894  was  nearly  the  same  as  that  30 
years  ago,  and  that  the  cost  of  production  fell  from  26.71  cents  per  pound, 
currency,  in  1864,  to  5.68  cents  in  1894.  In  1875,  when  the  yield,  it  is  true, 
was  considerably  less  per  fathom  of  ground,  the  cost  was  15. 79  cents.  In 
1874  it  was  15.13  cents  on  a  yield  of  577  pounds  of  ingot  copper  per  cubic 
yard,  so  that  the  figures  are  more  directly  comparable. 

"  The  managers  of  the  Quincy  Mine  have  been  in  the  habit  of  reporting 
annually  the  wages  received  by  miners  on  contract.  Here  are  the  figures  for 
a  series  of  years  : 

WAGES  OF  QUINCY  MINERS  ON  CONTRACT. 


1870  . 

.  .$^8  76 

1871.  .  . 

47.08 

1880  

1872.  .  . 

1881  

..  48.  «U 

X882  

48  83 

1874.  .  . 

.  .  48  ^8 

i88«;... 

187^.  . 

i  880  .  .  . 

!876  

1800.  .  . 

1804.  .  . 

1878... 

"  With  the  exception  of  the  two  years,  1872  and  1873,  better  wages  have 
been  paid  in  the  last  few  years  than  ever  before.  Evidently  labor  has  not 
been  the  sufferer  from  the  decline  in  prices  which  our  silver  friends  attribute 
to  '  the  appreciation  of  gold.'  In  fact,  wages  were  very  low  long  before  that 
calamity  occurred,  and  when  gold  was  still  very  '  abundant '  soon  after  the 
California  discoveries.  Thus  at  the  Cliff  Mine,  in  1853,  the  average 
monthly  earnings  were  $39,  when  the  product  of  the  famous  old  mine  sold 
at  27.32  cents  per  pound.  In  1894  the  Quincy  paid  $50.70  per  month  to  its 
miners  on  contract  and  got  about  9.5  cents  for  its  copper.  Yet  it  paid 
$400,000  to  its  shareholders.  We  might  multiply  examples  from  the  Lake 
Superior  copper  region  to  prove  the  very  large  reduction  in  cost  of  produc- 
tion, but  this  single  one  may  suffice." 

The  same  scientific  levelling  process  has  operated  on 
the  cost  of  production  in  gold-mining  and  silver-mining, 
be  it  remembered,  all  the  time,  and  a  fiat  of  the  State 
cannot  make  water  run  up  from  its  source. 

In  manufactures  of  the  cruder  sort,  no  less  than  in  those 
of  a  finer  and  complicated  nature,  the  same  effects  are 
noted — higher  wages  and  lower  cost  of  labor. 


LABOR  COST  IN  STEEL-MAKING.  25  I 

Some  fifteen  years  ago  Sir  Isaac  Lowthian  Bell  found 
the  cost  of  labor  in  the  conversion  of  pig-iron  into  steel 
rails  higher  in  America  than  in  England  by  the  difference 
in  the  rate  of  wages  ruling  in  the  two  countries.  He  found 
an  average  difference  in  the  daily  rates  of  about  100  per 
cent.  I  found  the  difference  in  the  average  of  earnings 
in  1888  to  be  about  50  per  cent,  higher  in  America,  but 
the  labor  cost  about  equal.  This  has  since  been  corrobo- 
rated by  other  investigations.  All  this  is  due  to  the  great 
improvements  and  inventions,  which  find  quicker  applica- 
tion in  America  than  elsewhere  on  account  of  the  high 
rates  of  wages  ruling  here. 

In  the  spring  of  the  present  year  Bessemer  steel  billets 
were  sold  at  two  to  three  dollars  less  a  ton  at  the  works 
in  Pittsburgh  than  in  Barrow-on-Furness  or  in  Middles- 
borough.* 

*  In  1887  and  in  1888,  already,  I  found  the  cost  of  labor  in  a  ton  of  steel 
rails  practically  the  same  in  Bethlehem  and  Pittsburgh,  from  the  ore  and 
coal  and  coke  up  to  and  including  the  finished  steel  rails,  as  in  England 
(Darlington  and  Middlesborough). 

The  Commissioner  of  Labor,  Mr.  Carroll  D.  Wright,  in  a  report  on  the 
same  subject,  makes  the  labor  cost  in  America  $3.78,  or  about  50  per  cent, 
higher  than  in  England.  This  results  from  the  employment  of  strange 
methods  of  computation  on  his  part. 

He  uses  in  his  computation  two  and  one  fourth  times  as  much  coal  for 
turning  iron  into  steel  rails  with  two  processes  in  American  practice  as  it 
takes  in  England  with  three  processes.  I  should  do  violence  to  the  under- 
standing of  my  readers  were  I  to  tell  them  that  it  does  not  take  more  fuel  in 
American  than  European  practice. 

He  averages  the  cost  of  coke  from  a  great  number  of  coke  works  in  the 
Union,  and  makes  this  statistical  compound  the  basis  of  his  calculations. 
This  product  of  the  imagination  is  rated  at  fully  twice  the  labor  cost  at 
which  Connellsville  coke  is  put  on  board  cars.  Connellsville  coke,  however, 
is  the  only  coke  used  in  Bessemer  iron,  as  Connellsville,  producing  cheapest, 
has  also  the  advantage  of  lying  nearest  the  Bessemer-iron-making  centres. 
The  remainder  of  the  difference  is  made  up  of  items  of  a  similarly  visionary 
character.  Removing  these  and  putting  in  the  place  of  statistical  quantities 


252  MONEY  AND  PRICES. 

Under  the  old  methods  working  with  hand  tools,  such 
as  are  still  universally  employed  in  the  black  country  in 
England  and  in  the  Taunus  mountains  in  Germany,  a 
nailmaker's  weekly  earnings  would  be  stated  at  a  high  rate 
as  averaging  $3,  but  his  labor  per  pound  of  nails  would 
cost  for  ordinary  sizes,  \\  cents.  An  American  nailmaker 
in  Pittsburgh  earns  in  two  thirds  of  the  time  of  a  hand 
nailer  $5  a  day.  His  work,  counting  helper  and  all,  does 
not  cost  one  half  the  price  which  one  of  the  old-time 
workers  is  paid.  Indeed  the  nails  are  sold  in  America  at 
a  considerably  lower  price  than  these  nailers  receive  as 
pay  for  their  work.*  In  composite  products  the  diver- 
gence of  time  wages  and  labor  cost  shows  still  more 
distinctly. 

The  average  of  wages  in  the  Waterbury  Watch  Com- 
pany works  was  given  me  for  men,  women,  and  young 
persons  as  averaging  $10.50  per  week.  The  labor  cost  in 
a  watch  was  50  cents.  In  a  watch  factory  in  the  Black 
Forest  in  Germany  the  average  wages  are  less  than  10 

the  actual  quantities  upon  the  basis  of  cost  of  the  materials  actually  used,  we 
have  the  same  cost  of  labor  remain  over  for  America  as  for  England. 

Were  a  manufacturer  to  conduct  his  business  upon  such  a  basis  as  is  im- 
puted in  the  report  of  the  Commissioner,  he  would  bankrupt  himself  very 
quickly  and  deserve  the  derision  of  the  commercial  world. 

Manufacturers  do  not  use  statistical  materials  at  "  scientific  "  average 
prices,  but  employ  commercial  materials  at  commercial  prices.  They  make 
use  of  every  stratagem  and  invention  for  the  purpose  of  saving  materials,  and 
these  they  always  obtain  from  the  cheapest  place  of  production  from  where 
it  can  be  transported  to  the  works  at  the  lowest  possible  freight  charge. 

*  The  following  price  quotations  are  taken  from  the  Iron  Age  of  April 
2Oth :  "Wire  nails  for  carloads  at  mill  may  be  named  at  851090  cents 
(100  Ibs.) ;  small  lots  from  store  at  New  York  $1.10  to  $1.15.  Cut  nails  at 
Pittsburgh  :  carloads  at  mill  70  cents  ;  less  than  carloads  80  cents  ;  small 
lots  on  dock  or  from  store  at  New  York,  90  cents."  These  are  the  lowest 
prices  ever  reached  in  any  country.  Since  then  a  considerable  rise  has 
set  in. 


LABOR-COST  LOWEST  IN  AMERICA.  253 

marks,  $2.40,  but  they  admit  that  they  cannot  compete 
with  America  in  the  lowness  of  the  labor  cost. 

In  a  Lynn  factory  the  wages  average  for  men,  $12 ;  for 
women,  $7.  A  particular  kind  of  ladies'  button  boots 
made  there  costs  35  cents  in  the  aggregate  of  all  the  labor 
parts  in  the  boots.  In  England  I  found  the  earnings  of 
men  between  $5. 76  and  $8.40,  and  that  of  women  between 
$2.83  and  $4.32 ;  but  the  cost  of  labor  in  the  same  class 
of  boots  aggregated  about  64  cents. 

We  could  follow  this  ad  infinitum,  and  we  should  always 
find  that  labor  cost  cannot  at  all  be  computed  from  the 
wage  rate  known  to  exist.  In  all  these  higher  developed 
occupations  the  piece  rate  prevails.  The  remarkably  low 
cost  (and  consequent  decline  in  price)  goes  hand  in  hand 
with  the  high  rate  of  wages,  because  of  the  minute  divi- 
sion of  labor,  the  employment  of  highly  perfected  machin- 
ery, and  the  fullest  employment  and  intense  exhaustion  of 
the  working  time,  which  the  best  conditioned  labor  alone 
is  capable  of  putting  into  the  work. 


CHAPTER  XI. 

Other   Causes    of    Price-Decline — The    Neglected    Element    in    Political 
Economy — The  Intellect  as  a  Creative  Force  and  Destroyer  of  Values. 

I  HAVE  shown  with  great  fulness  and,  it  seems  to  me, 
conclusively  in  the  last  chapter  that  that  part  of  the  price 
of  a  commodity  which  is  the  chief  element  of  cost,  and  is 
expressed  by  the  word  labor,  has  followed  a  downward 
tendency  throughout  this  century.  It  follows  from  this 
with  certainty  that  the  cost  of  labor  cannot  have  been  in- 
fluenced by  the  quantity  of  money  in  circulation.  The 
labor  cost  was  highest  when  the  stocks  of  the  circulating 
mediums  were  at  the  lowest ;  a  rise  in  wages  and  the 
decline  in  the  labor  cost  were  simultaneous  with  the 
increase  in  the  money  stocks,  from  the  quantity-theory 
view,  utterly  irreconcilable  facts.  If  this  principal  element 
in  the  cost  of  production  has  occupied  a 'smaller  and 
smaller  part  and  has  fallen  constantly  in  price  while  the 
money  quantity  has  risen  in  a  formerly  unheard  of  ratio, 
then  it  is  plain  that  the  price-decline  cannot  be  caused  by 
the  influences  as  assigned  by  the  advocates  of  free  coinage 
of  silver. 

Quite  on  the  contrary,  if  the  rate  of  wages  determined 
the  cost  of  production,  if  a  day's  labor  in  one  place  and 
at  one  time  were  worth  as  much  or  produced  as  much  as 
at  another  place  and  at  any  other  time,  and  if  prices  had 
to  be  measured  by  to-day's  rate  of  wages  in  comparison 

254 


FACTS  AGAINST  THEORY.  255 

with  prices  of  fifty  and  a  hundred  years  ago,  then  prices 
would  naturally  be  two,  three,  and  five  times  as  high  as 
they  were  then. 

If  the  money  quantities  in  existence  were  instrumental 
in  making  prices,  then  the  vast  accumulations  of  treasure 
the  world  over  ought  at  least  to  have  raised  prices  in  the 
proportion  in  which  labor  is  better  remunerated.  But  if 
on  the  contrary  prices  are  all  the  way  from  50  to  75  per 
cent,  lower,  in  many  of  the  commodities  of  chief  import- 
ance to  mankind,  while  wages  are  much  higher,  then  there 
must  be  other  influences  at  work  than  those  so  readily  ac- 
cepted, to  cause  this  remarkable  coincidence  of  a  rise  in 
wages  and  the  fall  in  the  labor  cost,  the  chief  cause  of 
the  fall  in  prices. 

It  is  a  fact  of  no  small  significance  that  this  rise  in 
wages,  which  is  so  satisfactory  an  evidence  of  progress, 
can  only  be  found  in  the  gold-paying  countries,  i.  e.,  the 
countries  which  accepted  for  their  standard  the  metal  of 
highest  value. 

With  this  is  connected  the  equally  well  established  fact 
that  the  decline  in  prices  is  most  noticeable  in  the 
advanced,  gold-paying,  countries.  Bi-metallists,  or  rather 
silver  mono-metallists,  deduce  from  this  ever-present  fact, 
that  gold  has  appreciated  in  purchasing  power,  meaning 
that  prices  have  fallen,  because  gold  alone  has  to  perform 
the  functions  now  which  the  two  metals  exercised  before. 
Of  course,  this  is  again  the  money-quantity  theory,  the 
mechanical  theory  of  prices. 

But  the  causes  of  the  phenomena  lie  deeper  than  a 
mere  accident  of  money  supply,  silver  depreciation,  or 
gold  appreciation. 

Because  the  causes  are  of  an  inherent  and  not  of  an 
extrinsic  character,  the  effect — low  prices  of  commodities 


256  MONEY  AND  PRICES. 

— will  remain  the  impressive  exponent  of  the  higher 
civilizations,  comprehending  the  gold-paying  nations  of 
the  world. 

The  gold-paying  countries  are  the  great  progressive 
nations.  There  all  the  great  industrial  revolutions  have 
taken  their  rise.  No  wonder  that  there  the  effect  was 
most  marked  in  this  decline  in  prices,  so  astonishing  to 
those  who  have  omitted  to  take  this  feature,  the  natural 
result  of  an  era  of  scientific  development,  into  their  cal- 
culation. Let  us  take  up  an  item  which  is  pre-eminently 
a  product  of  gold-paying  countries — pig-iron.  It  serves 
well  as  an  illustration  of  a  thing  hardly  considered  worth 
examining  as  an  element  in  price  making — brain  power. 

Let  us  see  what  havoc  this  overlooked  element  has 
produced.  We  can  see  thereby  what  a  value  maker  and 
a  value  destroyer  the  laboratory  has  come  to  be  alongside 
of  which  the  silver  and  gold  mines  of  the  world  play  a 
very  small  part  indeed. 

We  have  left  the  price  of  raw  iron  at  the  end  of  the 
seventeenth  century  in  England  at  £12  los.  od.  a  ton. 
The  weekly  output  of  a  furnace  was  about  10  tons. 
Charcoal  was  the  only  fuel  used.  Mineral  coal,  though 
abundantly  supplied  for  other  purposes,  and  an  article 
of  commerce  as  far  back  as  the  fourteenth  century, 
called  "  seacoal "  in  the  records  of  Merton  College,  because 
brought  by  sea  from  the  mines,  was  not  put  to  use  in 
iron-making  until  long  after.  A  law  was  promulgated 
against  iron-making  at  the  time  of  William  III.  on  account 
of  the  devastation  of  the  forests  by  the  extensive  con- 
sumption of  wood  and  charcoal  in  the  few  iron-making 
districts.  Yet  the  whole  annual  output  is  estimated  as 
not  exceeding  10,000  tons  a  year.  A  great  deal  of  the 
iron  consumed  was  brought  from  Spain. 


2KOM  PRICES  OF  A   HUNDRED    YEARS.  257 

Within  a  hundred  years  the  price  of  iron  came  down 
considerably.  But  still,  compared  to  our  time,  when  in 
Alabama  iron  is  made  as  low  as  $5.85  cents*  a  ton,  the 
lowest  cost  ever  reached  in  any  country,  the  price  must 
be  considered  extraordinarily  high,  although  it  is  not 
much  over  one  half  of  the  price  in  1694. 

Tooke  quotes  the  prices  of  pig-iron  from  1782  to 
1838: 

£     t.     d.  £    t.     d. 

In  1782  (Tooke) 600  and  7  10    o 

In  1794  (Tooke) 500  and  800 

In  1806  (Tooke) 700  and  900 

In  1822  (Tooke) 600  and  700 

In  1837  (Tooke) 600  and  6  10    o 

In  1852 2  10    o 

In  1857 3  10    • 

In  1887 f1     8     °  and$2     5     o 

Neither  appreciation  of  gold  nor  depreciation  of  silver 
can  have  had  any  effect  on  the  steady  price  decline  from 
1837  to  1886,  when,  as  I  well  remember,  pig-iron  sold  in 
Middlesborough  at  26s.  a  ton.  But  the  laboratory,  or 
what  stands  in  its  name,  technical  improvement,  had. 

The  prices  varied  considerably  in  every  year,  and  more 
so,  naturally,  between  years  of  war  and  years  of  peace. 
But,  on  the  whole,  an  average  of  £6  to  £7  a  ton  marks 
the  price  of  pig-iron  for  the  fifty  years  previous  to  1837, 
which  are  covered  by  the  investigations  of  Thomas 
Tooke. 

In  1850  the  lower  price  level  was  existing.  Since  then 
the  great  change  in  the  money  stocks  has  made  little 
difference  in  the  price  of  coequal  periods.  All  changes  in 

*  This  price  is  from  the  pay-rolls  for  the  month  of  September,  1894,  of  the 
Tennessee  Coal  and  Iron  Company  mentioned  in  the  preceding  chapter. 

f  Cleveland  iron. 

\  Bessemer  iron  and  Scotch  iron.     1887  marks  period  of  lowest  trade 
depression  in  English  iron  prices. 
17 


258  MONEY  AND   PRICES. 

price  are  traceable  to  the  changes  in  the  mechanism  and 
the  economy  of  production,  and  the  saving  of  materials  is 
not  a  small  part  of  the  achievements  which  dominate  the 
price. 

The  output  per  furnace  in  1788  is  stated  by  Sir  I. 
Lowthian  Bell  as  15^-  tons  ;  in  1796  as  20  tons  ;  in  1800  as 
21  tons;  and  in  1827  it  had  progressed  to  35  tons  per 
week  only.  At  the  present  time  the  product  in  England's 
largest  furnace  does  not  exceed  600  tons,  while  in  America 
furnaces  are  built  which  produce  1400  tons  a  week.  This 
is  as  much  and  more  per  week  than  the  whole  output  per 
year  of  the  old  furnaces  sixty  and  a  hundred  years  ago. 
The  capacity  beyond  a  certain  extent  is  no  advantage, 
however,  as  our  American  ironmasters  are  beginning  to  find 
out,  and  is  a  matter  of  conviction  among  ironmasters  in 
England.  The  advantages,  from  the  general  progress 
made,  find  their  expression  in  the  improvements  by  which 
labor  and  fuel  are  saved,  and  not  in  the  size  of  the  fur- 
nace. The  quantities  used  are  not  different  per  ton  of 
pig-iron,  whether  the  capacity  of  furnaces  of  equally 
improved  condition  is  500  or  1500  tons.  The  saving  in 
material  and  in  labor  is  the  sole  cause  of  the  great  price 
reduction. 

What  the  Improvements  have  Led  to. 

In  1835  the  first  cold-blast  furnace,  according  to  the 
same  authority,  with  a  capacity  of  70  tons  a  week,  con- 
sumed 6  tons  of  coal  per  ton  of  pig-iron.  The  introduc- 
tion of  a  hot  blast  at  650°  Fahrenheit  produced  iron  with 
4|  tons  of  coal.  In  1855  the  use  of  the  escaping  gases  for 
steam  and  hot  air,  with  a  blast  of  800°,  had  reduced  the 
amount  of  fuel  to  3  tons  of  coal.  In  1865  the  furnaces 
had  been  so  improved  that,  with  a  blast  of  1000°  and  a 


COST  OF  SOUTHERN  IRON.  259 

weekly  capacity  of  450  to  550  tons,  no  more  than  2 
tons  of  coal  were  required.  At  the  time  of  my  investiga- 
tions in  1888  the  coal  consumption  was  if  tons. 

The  cost  of  labor  depends  in  pig-iron  on  the  tonnage 
of  the  materials  handled.  Not  alone  that  the  improve- 
ments save  fuel,  but  the  extraction  of  the  metal  from  the 
ores  is  now  so  complete  that  no  more  than  what  is 
indicated  by  the  percentage  of  iron  in  the  ore  is  required, 
whereby  also  great  savings  are  realized. 

All  this  explains  why  the  labor  cost  in  the  furnace 
work  of  a  ton  of  pig-iron  is  now  less  than  one  half  what 
it  was  one  hundred  years  ago,  and  even  sixty  years  ago. 
It  explains  why  the  workman  earns  100  per  cent,  more  in 
wages,  and  why  we  can  buy  three  tons  of  iron  for  the 
same  amount  of  money  that  was  necessary  for  buying 
one  ton  then. 

In  this  saving  of  materials,  quantitatively,  we  must  also 
include  the  price  reductions  in  the  materials,  coal,  coke, 
and  ore,  brought  about  by  the  improved  processes  in 
mining,  coking,  etc. 

Speaking  of  the  cost  of  coal  and  iron  in  Alabama,  The 
Engineering  and  Mining  Journal,  of  January  27,  1894, 
has  a  statement  of  the  causes  that  made  possible  the  price 
reduction  which  has  astonished  the  world.  It  says: 

"  In  the  matter  of  costs  the  comparison  between  those  of  the  present  and 
the  past  is  interesting.  Referring  more  particularly  to  the  Birmingham  dis- 
trict, when  the  red  ore  mines  were  first  opened  below  Birmingham  the  soft 
outcrop  ore,  requiring  almost  no  stripping,  was  loaded  into  cars  for  30  to  35 
cents  per  ton,  but  in  early  underground  development  it  cost  almost  double 
this  price.  Now,  though  it  is  taken  from  considerable  depths  underground, 
and  air  drills  and  dynamite  are  required  for  the  work,  it  is  delivered  on  cars 
for  50  cents  per  ton,  this  price  allowing  a  good  profit  to  the  contractor. 
With  17^  cents  freight  to  the  furnace  and  using  2.2  tons  per  ton  pig-iron, 
the  cost  of  ore  per  ton  of  pig  is  $1.485. 

"  In  coal  mining,  notwithstanding  the  fact  that  a  much  greater  distance 


260  MONEY  AND  PRICES. 

is  covered  in  the  workings,  there  has  been  a  marked  decrease  in  cost  of  pro- 
duction. When,  a  few  years  ago,  coal  was  loaded  at  the  mine  for  70  cents 
a  ton,  it  was  thought  to  be  exceedingly  low,  being  a  reduction  of  nearly  10 
cents  a  ton  under  the  cost  not  long  before.  But  at  present  this  work  is  being 
done  for  60  cents  a  ton,  and  in  some  few  cases  for  less,  and  the  coal  is  pro- 
duced in  cleaner  and  better  condition  than  formerly.  This  reduction  in  cost 
is  largely  due  to  substituting  common  labor  for  miners  in  loading  the  coal 
in  the  mine  ;  now  the  miner  only  cuts  the  coal.  The  freight  charge  from 
mine  to  ovens  is  iaj  cents  per  ton,  and  the  practice  of  the  district  requires 
1.6  tons  coal  to  one  ton  coke  ;  consequently  coal  and  freight  per  ton  coke 
amount  to  $1.16.  Adding  to  this  35  cents,  the  contract  price  for  coking 
(the  contractor  keeping  up  the  plant  and  furnishing  everything  but  the  coal), 
the  total  cost  of  coke  is  $1.51.  At  some  plants  45  cents  is  paid  for  coking, 
adding  10  cents  to  the  cost  given.  Good  furnace  practice  uses  about  i^  tons 
of  coke  per  ton  iron,  making  $1.89  the  cost  of  coke  per  ton  of  iron.  Lime- 
stone costs  on  an  average  65  cents  delivered,  and  three  fourths  of  a  ton  is 
required,  or  50  cents,  per  ton  pig. 

"  Taking  these  figures,  the  material  used  in  one  ton  of  pig-iron  is  as 
follows : 

i\  tons  coke  @  $1.51 $1.89 

2\    "     ore  @      .50 1.48 

j  ton  limestone    @     .65 50 

Labor 1.25 

Repairs 50 

Supplies 50 

Selling  expenses 25 

Total $6.37 

"  At  one  plant  labor  costs  $r  per  ton  of  iron,  repairs  50  cents,  and  selling 
expenses  25  cents,  a  total  of  $1.75,  but  this  is  undoubtedly  below  the  aver- 
age. It  is  a  comparatively  short  time  since  the  lowest  labor  in  the  district, 
excepting  possibly  two  plants,  was  over  $1.50,  and  in  certain  known  cases 
$1.80.  A  fair  average  now  is  $1.25,  though  a  number  of  plants  show  the 
labor  item  at  $1.10  to  $1.20  through  considerable  periods.  In  the  matter 
of  repairs,  supplies,  and  selling  expenses,  while  in  the  instance  given  they 
amount  to  but  75  cents,  this  is  at  least  50  cents  under  the  average,  as  repairs 
and  supplies  alone,  taking  a  period  covering  one  campaign,  or  even  a  year, 
will  amount  to  50  cents  each,  and  selling  expenses  25  cents  more.  On  this 
latter  basis  $2.50  for  all  items  other  than  material  gives  a  total  cost  of  $6.37 
per  ton,  while  in  the  exceptional  instance  given  it  is  but  $5.62.  Of  course 
these  figures  do  not  include  interest  or  capital  accounts. 

"  It  is  hardly  necessary  to  comment  upon  these  figures,  other  ^h^n  (hat 
they  are  actual  working  costs." 


EFFECT  ON  GOLD  PRODUCTION.  261 

It  is  but  a  few  years  ago  that  $9.50  was  considered  a 
very  low  cost  of  Alabama  iron  of  the  most  economically 
worked  and  best  built  furnaces,  while  many  of  the  iron- 
makers  proclaimed  this  a  ruinous  price 

The  improvements  in  mining  operations,  and  this  ap- 
plies to  gold  and  silver  production  *  as  well,  if  they  do 

*  The  effect  of  the  rapidly  introduced  improvements  on  gold  production 
is  illustrated  in  the  following  statement  from  the  New  York  Journal  of 
Commerce,  referring  to  the  new  process  employed  in  the  treatment  of  gold 
ores  : 

"  It  is  of  interest  to  note  a  recent  improvement  in  the  chemical  treatment 
of  gold  ores,  by  which  the  production  of  gold  has  already  been  considerably 
increased,  and  which,  eventually,  must  largely  augment  the  yearly  output. 
This  treatment  is  what  is  known  as  the  cyanide  process.  The  short  inaugu- 
ral period  of  its  existence  debars  the  possibility  of  complete  statistics  ;  but 
an  example  may  be  cited  which  will  show  the  proportion  of  gold  extracted 
which  heretofore  has  remained  unrecovered.  From  reports  of  mining  com- 
panies in  the  Rand  district  it  is  seen  that  during  the  past  four  years  the  gold 
output  has  shown  a  very  marked  and  steady  increase.  In  1890  the  total 
product  for  the  year  was  494,870  ounces,  while  in  1894  it  reached  over 
2,000,000  ounces.  It  is  calculated  that  the  product  of  the  present  year  will 
approximate  3,000,000  ounces.  The  reports  give  the  number  of  ounces  ob- 
tained by  the  milling  and  cyanide  processes.  It  is  not  uncommon  to  find 
that  from  a  third  to  a  half  of  the  gold  produced  has  been  chemically  ex- 
racted.  One  mine  out  of  a  total  of  4138  ounces  reports  1852  ounces 
obtained  by  the  cyanide  process.  Another,  for  the  month,  1925  tons  ore, 
yielding  675  ounces  gold  ;  cyanide  works,  1260  tons  ore,  yielding  788 
ounces.  Many  other  companies  show  similar  results.  The  gold  extracted 
by  chemical  treatment  is  nearly  all  clear  gain,  since  the  greater  part  is  ob- 
tained from  tailings,  and  represents  gold  actually  recovered,  and  which 
would  have  been  entirely  lost  in  the  milling  process. 

"  In  a  few  years  we  may  find  that  the  quantity  of  gold  extracted  by  the 
cyanide  process  or  other  chemical  treatments  has  risen  to  large  proportions. 
The  process,  as  can  be  inferred  from  the  above,  is  adapted  to  poor  ores. 
The  very  wide  distribution  of  such  ores,  together  with  its  application  to  the 
tailings  of  stamping  mills  and  mattes  all  over  the  world,  heretofore  not 
available  for  remunerative  treatment,  will  open  a  field  of  production  which 
must  very  materially  increase  the  supply  of  gold." 

A  correspondent  from  Johannesburg  to  The  Economist  (London)  gives  the 


262  MONEY  AND  PRICES. 

not  outstrip,  at  least  equal,  those  in  all  other  branches  of 
metallurgy.  We  have  stated  the  gradual  reduction  in 
the  cost  of  producing  copper  in  a  mine  operated  by  the 
same  company  for  a  period  of  forty  years  to  one  fourth 
the  former  expense. 

The  causes  producing  this  result  are  stated  by  the  Iron 
Age  very  conclusively,  and,  as  they  cover  the  whole  field, 
I  will  give  the  paragraph  in  its  original  shape  : 

"  The  lowering  in  cost  is,  of  course,  due  to  a  multiplicity  of  improvements 
in  every  department.  We  need  only  allude  to  the  introduction  of  high  ex- 
plosives, the  use  of  machine  drilling,  the  employment  of  modern  stamps  for 
crushing  the  rock,  the  better  methods  of  handling,  the  more  economical 
engines  for  hoisting  and  pumping,  the  lowering  of  the  cost  of  transporting 
the  rock,  the  cheapening  of  the  supplies,  the  reduction  in  smelting  expenses 
and  transportation  to  market,  the  lessening  of  cost  of  selling,  and  the  distri- 
bution over  a  larger  product  of  the  general  expenses  and  of  outlays  for  ad- 
ministration. 

"  As  bearing  on  the  introduction  of  power  drills,  we  have  come  across  the 
following  data  which  deal  with  the  cost  of  underground  work  at  the  Osceola 
Mine.  The  cost  of  underground  work  was  as  follows  : 


1879. 

1880. 
$18  67 

1881. 

Drifts,  per  foot  

8.66 

10  78 

expert  information  of  the  practical  workings,  that  the  various  processes  have 
reached  so  high  a  state  of  perfection,  that,  whereas  at  the  beginning  of  the 
industry  only  50  per  cent,  of  the  gold  in  the  quartz  was  extracted,  fully  80 
per  cent,  is  secured  now,  and  that  the  proportion  is  likely  to  be  raised  after 
some  years  to  ninety  in  a  hundred.  Working  expenses  have  shrunk  to  such 
an  extent  that  whereas  six  years  ago  several  ounces  to  the  ton  were  neces- 
sary to  make  a  mine  pay,  a  profit  is  now  in  many  cases  obtainable  with  only 
five  pennyweights.  "  Better  organization,  as  well  as  cheaper  labor  or  fuel," 
the  writer  adds,  "  and  improved  processes,  may  even  bring  still  poorer  ores 
within  the  scope  of  the  industry." 

What  bearing  these  new  processes  will  have  on  gold  production  is  easily 
imaginable.     It  shows  plainly  enough  in  the  annual  rate  of  production. 


THE  MODERX  S11.KL-MILL.  26  j 

"  In  1879  all  the  work  was  done  by  hand.  In  1880  and  since  then  it  was 
done  by  power  drills. 

"  While  it  might  not  be  possible  to  trace  accurately  the  influence  upon 
reduction  of  cost  of  all  of  the  important  technical  improvements  introduced, 
yet  there  can  be  no  doubt  from  a  study  of  the  vast  amount  of  data  available 
that  the  betterments  alluded  to  are  solely  responsible  for  the  very  marked 
decline  in  the  cost  of  production  and  in  the  selling  prices  of  copper." 

The  effect  on  prices  of  products  of  a  more  complicated 
nature  than  the  extraction  of  iron  and  other  metals  is 
necessarily  equally  great.  It  progresses  in  the  proportion 
in  which  invention  has  been  able  to  substitute  machinery 
and  the  operation  of  newly  discovered  agencies  for  the 
slow  processes,  still  in  use  in  the  more  backward  portions 
of  the  progressive  countries  even,  and  little  different  from 
those  we  find  among  the  aborigines  of  this  and  other 
continents. 

I  have  mentioned  the  reduction  of  labor-cost  in  steel- 
rail-making  in  America.  Here  we  beat  the  world  in  the 
rapid  succession  of  improvements.  The  consequence  is 
that  our  latest  improved  plants  produce  rails  cheaper  in 
labor-cost  than  is  done  anywhere  in  the  world.  The  con- 
tinuous mill  rolls  the  rail  from  the  ingot  as  it  comes  from 
the  converter,  cuts  it  in  suitable  lengths,  and  loads  it  on 
trucks,  even,  all  by  automatic  appliances.  The  number  of 
men  required  for  a  train  has,  by  the  introduction  of  these 
appliances,  been  reduced  from  seventeen  to  five  and  the 
roller  in  charge  of  the  train.  • 

I  am  told  that  the  latest  mill  put  up  by  the  Carnegies 
has  improved  on  that  rate  of  perfection,  even.  But  the 
cost  of  the  plant  is  enormous.  It  is  said  that  the  cost  of 
fitting  up  a  modern  rail  mill  is  up  to  $1,500,000,  outside 
of  the  cost  of  the  building. 

Unless  a  high  rate  of  wages  were  pre-existing  the  in- 
ducement for  applying  all  these  improvements  would  be 


264  MONEY  AND  PRICES. 

wanting.  In  some  remote  countries,  where  wages  are  low- 
est, the  old  furnaces  which  England  employed  a  hundred 
years  ago  would  probably  be  considered  an  improve- 
ment. 

I  have  not  the  space  at  my  command  to  follow  this 
improvement  in  methods  by  which  the  cost  of  labor  is 
reduced,  the  chief  creator  of  values  and  prices,  into  other 
branches.  Every  day  brings  new  inventions  and  new 
discoveries  by  which  the  improvements  of  a  few  years 
ago  appear  antiquated.* 

The  saving  of  materials  is  a  cause  of  price  decline  in 
many  of  the  most  important  manufacturing  branches, 
hardly  less  important  than  that  which  we  have  observed 
in  the  labor  cost. 

The  recovery  of  waste  products  yields  far  in  excess  of 
a  paying  profit  in  quite  a  number  of  industries.  The 
cheapness  of  paper-making  is  due  to  the  recovery  of 
chemicals  in  pulp-making,  which  formerly  went  to  waste. 

*  That  this  economizing  of  materials  and  of  labor — with  increasing  wages 
— is  entirely  attributable  to  the  application  of  science  to  the  productive  pro- 
cesses of  industry,  and  is  the  only  cause  of  the  fall  of  prices,  is  easily  de- 
monstrable from  steel  rails. 

In  1865  Bessemer  steel  rails  sold  in  England  at  £17  loj.  ($85).  Hema- 
tite pig-iron,  used  for  Bessemer  rails,  was  a  little  under  ^4,  making  the  differ- 
ence between  the  crude  metal  and  the  finished  rail  as  ^"4  3-r.  for  the  iron, 
and  about  ^13  "js.  for  the  steel.* 

At  the  present  time  Bessemer  rails  sell  at  £3  12s.  6</.,  about  $18, — and 
Bessemer  pig-iron  at  £2  3^.  the  ton,  so  that  there  is  between  the  cost  of  the 
crude  metal  and  the  selling  price  of  the  rails  a  difference  of  barely  £i  6s. 

The  rate  of  wages  has  risen  in  England  within  the  last  thirty  years  by 
fully  twenty-five  per  cent.  The  difference  of  £12  (90.25  per  cent.)  is  the 
part  of  saving  due  to  the  causes  here  treated  as  the  real  price-reducing  fac- 
tors, science  and  improvement,  so  far  as  this  sum  does  not  cover  diminished 
capital  earnings  and  royalties  paid  to  the  inventor. 

*  See  statement  of  Sir  I.  Lowthian  Bell  in  Part  I.  Report  of  Royal  Commission  on 
Depression  of  Trade,  1886, 


REFUSE  AS  A  SOURCE  OF  WEALTH.  265 

The  price  of  paper  is  now  not  more  than  half  what  it  was 
twelve  or  fifteen  years  ago. 

The  by-products  from  gas-making,  formerly  allowed  to 
go  to  waste,  pay  the  full  regular  rate  of  dividend,  and  be- 
side made  possible  the  great  reduction  in  the  price  of  gas 
which  we  observe  in  England,  and  which  we  long  for  in 
America. 

Agriculture  and  Other  Industries. 

New  industries  have  been  created  from  the  utilization 
of  these  by-products.  The  constant  cheapening  in  the 
chemical,  and  chiefly  in  the  color-making  industries,  is 
based  on  the  use  made  of  these  waste  materials  from  gas- 
making,  and  from  the  greater  economy  practised  in  their 
reduction.  To  Germany  her  universities  and  technical 
high-schools  have  become  sources  of  wealth,  though  this 
is  not  yet  recognized  as  such  in  the  economic  text-books. 

This  cheapening  process  by  means  of  the  intellectual 
forces  directed  on  the  economy  of  production  has  come 
entirely  from  the  gold-paying  countries,  and  certain  price 
revolutions  emanating  therefrom  are  simply  enormous. 
Beet  sugar,  clearly  the  creation  of  chemical  science,  has 
been  reduced  to  one  half  its  former  cost,  because  scientists 
have  so  perfected  the  process  of  extracting  all  saccharine 
matter  from  the  beet  that  they  obtain  about  14  per  cent, 
where  8  per  cent,  marked  the  proportion  about  twenty 
years  ago. 

The  cheapest  producers  make  the  price  which  the 
dearer  producers  have  to  meet  as  soon  as  supply  covers 
the  full  demand,  and  this  can  only  be  done  by  following 
the  lead  and  adopting  improved  methods  of  cultivation. 
The  sugar  planters  have  had  to  adapt  themselves  to  the 
new  spirit,  and  are  profiting  by  the  change. 


266  MONEY  AND  PRICES. 

The  slack  from  the  low-grade  iron  ores  of  the  Cleve- 
land district  has  been  accumulating  for  the  last  forty  or 
fifty  years  around  the  Middlesborough  and  neighboring 
furnaces.  They  were  an  encumbrance  on  much  valuable 
land. 

In  1888  a  manufacturer  at  Stockton-on-Tees  showed 
me  ships  loading  under  a  contract  with  German  firms  of 
80,000  tons  at  a  rate  of  4^.  a  ton  for  use  as  fertilizers.  It 
was  the  beginning  of  a  large  trade.  Since  then,  of  course, 
the  use  of  these  slacks,  rich  in  phosphorus,  has  become 
much  more  general.  Agricultural  chemistry  gives  a  value 
to  the  refuse  of  the  furnace  as  well  as  it  does  to  the  bone 
heaps  and  the  offal  of  the  slaughtering  and  packing 
houses,  supplies  the  carrying  trade  and  transportation 
lines  with  tonnage  of  immense  extent,  and  restores  to  the 
soil  the  fecundity  of  which  exhausting  crops  have 
robbed  it. 

That  the  application  of  science  to  manufacturing  in- 
dustries, metallurgy  and  mining  included,  is  the  great 
price-disturbing  element  will  hardly  be  denied  by  any  one 
who  has  the  smallest  notion  of  the  facts  which  surround 
the  economy  of  production.  But  the  decline  in  agricul- 
tural prices  has  been  treated  as  something  caused  less  by 
the  changes  referred  to,  and  more  by  the  fall  in  silver  and 
an  implied  insufficiency  of  circulation. 

There  is  more  theorizing  on  agriculture  and  less  prac- 
tical inquiry  into  the  results  following  the  changes  of 
methods  than  in  any  other  human  employment.  To 
what  extent  improvement  has  followed  the  introduction 
of  the  best  methods  in  the  past  can  be  seen  from  a  com- 
parison of  the  state  of  agricultural  yield,  gross  and  net, 
in  Russia  on  the  one  hand  (marking  to-day  the  level  of 
England  of  the  fourteenth  century)  and  of  the  England 


PROGRESSIVE  AGRICULTURE.  267 

of  to-day.  (Russia's  average  per  acre  in  wheat  is  about 
seven  bushels,  that  of  England  thirty  bushels.) 

But  the  extent  to  which  these  differences  in  yield,  i.  e., 
larger  net  profit,  even  under  a  rule  of  low  prices,  can  be 
obtained,  I  noticed  last  year  in  a  visit  to  the  South.  In  a 
soil  which,  without  fertilizing,  does  not  produce  anything, 
and  whose  sand  is  not  distinguishable  from  that  of  the 
desert,  truck  farmers  produce  the  most  astonishing  crops. 
I  visited  several  of  them  near  Savannah,  Ga.  One  of 
them,  who  is  known  as  one  of  the  leading  men  in  the  in- 
dustry, Major  Ryal,  was  good  enough  to  give  me  a  state- 
ment of  his  business  and  accounts.  He  farms  about  125 
acres,  a  large  part  broken  in  by  himself.  The  farm  yields 
now,  in  years  when  he  can  favorably  market  his  crops,  as 
much  as  $25,000  in  salable  value,  and  he  clears  all  the 
way  from  eight  to  ten  thousand  dollars.  He  raises  gen- 
erally three  crops  a  year.  First,  cabbages  and  early 
potatoes,  beets,  and  other  kitchen  garden-stuff.  The 
two  former  are  the  big  money  crops.  Early  potatoes,  if 
they  do  not  suffer  from  frost  and  can  be  put  on  the 
market  in  favorable  time,  bring  $4  to  $5  a  barrel.  An 
acre  yields  him  from  fifty  to  a  hundred  barrels.  Twenty 
acres  in  potatoes,  under  favorable  conditions,  can  bring 
therefore  as  high  as  $10,000.  In  the  time  of  my  visit, 
to  Savannah  he  had  cleared  from  ten  acres  1700  crates 
of  cabbages,  which  netted  him  $5300  after  deducting  43 
cents  per  crate  for  freight  to  New  York.  As  a  second 
crop  he  raises  corn,  and  as  a  third  crop  hay. 

Of  corn  he  gets  forty  bushels  per  acre,  and  of  hay  two 
to  three  tons.  If  we  consider  the  smallness  of  the  aver- 
age yield  of  the  farming  of  Georgia,  which  is  not  more 
than  ten  to  eleven  bushels  to  the  acre  in  corn,  and  one 
and  a  half  tons  per  acre  of  hay  in  Southeastern  Georgia, 


268  MONEY  AND  PRICES. 

we  can  better  estimate  the  difference  which  divides  one 
mode  of  farming  from  another ;  we  can  easily  understand 
how  great  the  influence  of  the  application  of  scientific 
methods  in  farming  on  price  decline.  If  farming  is  con- 
ducted as  an  industry  like  manufacturing,  the  extent  of 
supply  cannot  be  foreseen. 

My  informant  uses  $50  worth  of  fertilizers  per  acre ; 
$30  of  this  was  artificial  guano,  and  $20  farm  manure, 
partly  produced  on  the  farm,  and  partly  brought  from 
Savannah.  Of  course,  every  other  part  of  cultivation  was 
in  harmony  with  this  high  manuring,  which,  however, 
prevails  in  truck  farming  in  general,  though  in  the  South 
generally  to  a  less  degree  than  in  the  Northern  States. 

In  cotton  growing  the  same  facts  are  noticeable.  At 
the  low  price  at  which  cotton  is  selling  now  a  profit  is 
realized  where  better  methods  of  cultivation  are  applied. 
The  average  for  Georgia  is  about  160  pounds  to  the  acre 
in  a  fairly  good  cotton  year.  This  is  equal  to  three  acres 
to  a  bale.  This  average  includes  the  fertilized  and  non- 
fertilized  land.  The  non-fertilized  produces  but  one  bale 
to  five  or  six  acres,  and  to  this  mode  of  farming  many  a 
poor  farmer  is  restricted. 

With  an  outlay  of  $3  (giving  two  hundredweight  of 
guano)  one  half  bale  of  lint  cotton  is  produced,  making  a 
difference  of  150  pounds  (counting  the  bale  at  500 
pounds),  or,  at  si'x  cents  a  pound,  $9  extra  yield  in  the 
improved  farming.  Except  for  the  picking,  which  is  paid 
for  by  the  cotton  seed,  the  labor  is  not  greater  under  one 
system  than  under  the  other.  On  the  contrary,  it  is  less 
because  the  same  results  are  reached  from  confining  the 
farming  operations  to  a  smaller  extent  of  territory. 

Where  richer  fertilizing  is  employed,  as  is  done  by 
some  progressive  farmers,  most  satisfactory  net  results  are 


KESUL  TS  OF  PER  TI LI  ZING  LAND.  269 

reached.  The  application  of  ten  hundred-weight  of  fer- 
tilizers at  a  cost  of  $16  gave  a  yield  of  750  pounds  of 
cotton.  The  tendency  now  is  more  and  more  toward 
smaller  farms  and  better  cultivation.  The  farmer  doing 
his  own  work,  ploughing,  etc.,  which  is  now  pretty  gen- 
eral, would  realize  $8.50  under  the  lower,  and  $25  under 
the  higher  fertilizing  of  land  per  acre.  Allowance  is  here 
made  in  this  statement  only  for  hoeing  and  ginning,  and, 
as  explained,  the  picking.  Leaving  out  the  account  of 
the  highly  fertilized  cotton  land,  as  of  a  more  experi- 
mental nature,  we  can  see  in  the  two  examples  the  wide 
difference  in  results  of  farming  under  poor  and  under 
proper  treatment  of  the  soil. 

The  greatly  increased  product  of  the  last  few  years  is 
generally  conceded  by  good  authority  to  be  "  due  more 
to  improved  methods  of  cultivation  and  to  the  shifting  of 
the  cotton  belt  to  sections  better  adapted  to  securing 
larger  results  per  acre,  than  to  larger  acreage." 

But,  with  due  allowance  of  the  increase  in  the  newer 
sections,  the  increased  yield  per  acre  shows  as  well  in 
returns  for  Georgia  as  it  does  in  Texas  and  other  cotton 
States.  The  "  improved  methods  of  cultivation,"  there- 
fore, can  be  taken  as  pretty  generally  distributed. 

Whatever  the  ultimate  effect  on  the  inner  economies  of 
the  farmer  and  of  farming,  the  fact  is  beyond  dispute  that 
the  decline  in  the  price  within  the  last  few  years  is  due  to 
these  causes,  resulting  in  an  over-supply,  and  not  to  an 
attributed  cause,  like  the  fall  in  the  price  of  silver.  Be- 
fore the  over-supply  of  1890-91  and  1891-92  came  on  the 
market,  the  price  was  in  1890  about  the  same  as  in  1860. 
The  average  for  the  ten  years  ending  with  1860  was  barely 
one  cent  higher  than  the  average  for  1881  to  1890. 

It  has  not  yet  come  to  pass  that  the  Bombay  shipper  takes 


270  MONE  Y  AND  PRICES. 

less  in  pay  than  the  equivalent  in  rupees  of  the  gold  price 
in  Liverpool  when  a  rise  in  price  takes  place  there  on  any 
shortage  in  the  supply. 

But  with  crops  such  as  the  one  of  1894-95  added  on  to 
the  surplus  from  the  two  previous  extraordinary  crop 
years  a  low  price  is  a  matter  of  course.  It  ought  not  to 
be  found  more  surprising  than  the  low  prices  obtained  for 
cotton  in  1848  and  1849,  which  were  considerably  under 
the  common  average  of  preceding  and  succeeding  years 
for  no  other  reason  than  the  one  which  depresses  the  price 
at  this  time. 

Within  six  months  of  this  year,  1895,  the  price  of 
cotton,  however,  has  risen  from  5^-  cents  to  over  9  cents, 
as  a  consequence  of  the  crop  turning  out  to  be  below  the 
average  yield.  The  consumption  is  at  present  something 
in  the  neighborhood  of  7,500,000  bales.  The  crop  is  esti- 
mated at  about  a  million  below  this  figure.  The  surplus 
in  the  market  at  the  beginning  of  the  new  crop  year  is 
estimated  at  not  less  than  3,500,000  bales  accruing  from 
the  excess  crops  referred  to  above.  The  highest  shortage 
estimate  would  still  leave  a  surplus  on  hand  of  2,500,000 
bales  to  carry  over  to  the  beginning  of  a  new  crop  year 
for  which  the  ground  has  not  been  broken  yet.  And  yet 
such  influence  over  price  has  been  exerted  by  an  appre- 
hension on  so  unreal  a  basis. 


CHAPTER  XII. 

Reductions  in  other  Elements  which  Determine  Prices — Agricultural  Pro- 
ducts and  Systems  of  Land  Tenure  and  Cultivation — Working  under 
Freehold  and  one's  own  Farm — Producing  a  Money  Crop — The  Influ- 
ence of  Extended  Transportation  Facilities  on  Crop-raising — The  Re- 
sulting Gain  in  Increasing  Fields  of  Supply — New  Continents  Made 
Accessible — Decline  in  Freight  Charges — Now  only  Nominal  in  Com- 
parison with  Rates  Fifty  and  Twenty-five  Years  ago — Prices  Reduced  to 
Consumer  without  correspondingly  Affecting  Producer. 

"  THE  tendency  of  prices  is  toward  the  cost  of  produc- 
tion "  is  a  truism  in  economics.  But  it  leaves  the  ques- 
tion open  :  What  is  the  cost  of  production  ?  The  question 
can  easily  be  answered  in  products  of  general  industry, 
but  is  not  so  quickly  disposed  of  in  agriculture.  Here  a 
great  many  points  play  very  important  parts,  which  enforce 
production  to  proceed  whether  the  cost  of  production  is 
covered  or  not. 

The  cost  of  production  in  agricultural  products  besides 
is  something  quite  different  in  one  country  from  what  it 
is  in  another.  The  methods  of  cultivation,  systems  of 
land  tenure,  whether  land  is  cultivated  by  tenant  farmers 
with  hired  help  or  by  farmers  owning  the  land  and  work- 
ing it  themselves  with  such  help  as  the  members  of  the 
family  can  give,  etc.,  greatly  affect  the  cost  of  production 
and  change  the  relative  cost,  between  one  set  of  producers 
and  another,  very  materially. 

Aside  of  this,  economic  forces  are  at  play,  as  we  shall 
see,  which  in  new  countries,  at  least,  take  little  heed  of 

271 


272  MONEY  AND  PRICES. 

many  elements  in  cost  which  producers  in  England  carry 
as  most  important  parts  of  their  calculations. 

This  is  most  clearly  illustrated  in  wheat-raising.  The 
method  of  figuring  of  cost  of  English  wheat  applied  to 
American  wheat-raising  falls  short  of  its  aim  on  account 
of  the  neglect  of  a  very  important  consideration,  the  posi- 
tion of  the  American  farmer  as  a  compulsory  raiser  of 
wheat. 

As  far  back  as  a  dozen  years  ago  English  farmers  and 
landlords,  beginning  to  feel  the  pinch  of  declining  wheat 
prices  under  pressure  of  American  competition,  sent  ex- 
perts over  to  investigate  the  cost  of  production.  I  remem- 
ber reading  the  statement  of  cost  of  raising  wheat  in 
Michigan,  from  which  the  comforting  information  was 
given  to  the  English  farmer  that  it  would  soon  become 
impossible  for  American  famers  to  profitably  compete 
with  English-grown  wheat  on  the  basis  of  then  existing 
prices. 

The  export  price  average  was  then  in  the  neighborhood 
of  $1.15  per  bushel.  They  calculated  on  the  exhaustion 
of  the  soil  and  on  the  necessity  of  putting  increasing 
quantities  of  labor  and  capital  on  the  soil,  and  on  the  con- 
sequent rise  of  price  to  the  English  level. 

But  the  growing  of  wheat  at  declining  prices  has  gone 
on  ever  since.  Not  alone  the  new  States,  but  States  like 
Ohio  and  Michigan,  keep  on  raising  wheat. 

Leaving  out  the  low  price,  the  result  of  the  financial 
distress  in  America,  and  great  crops  in  Argentina  and 
elsewhere  in  1894,  the  average  export  price  has  come 
down  to  a  mean  of  about  70  cents.  Under  this  price  the 
London  Daily  News,  in  a  recent  issue,  consoles  its  readers 
that  "  the  competition  cannot  go  on  permanently,"  "  that 
there  must  be  loss  is  certain." 


DIFFICULTIES  OF  TENANT  FARMING.  2?$ 

No  doubt  from  the  point  of  view  gained  from  the  Eng- 
lish mode  of  farming  the  predictions  might  have  become 
true. 

Correct  account-keeping  in  English  farming  proves  the 
inevitable  doom  of  the  American  farmer.  Counting  rent, 
or,  if  not  rent,  interest  on  capital  invested  or  borrowed, 
along  with  labor,  as  so  much  charged  against  the  crop,  it 
is  not  unlikely  that  under  prevailing  prices,  averaging 
hardly  more  than  seven  dollars  salable  value,  the  farmer 
would  not  make  his  cost.  But  there  is  the  difference  of 
farming  your  own  land  "  by  your  own  hands,  living  a  hard 
life  on  pork  and  beans,  exposed  to  all  the  hardships  and 
working  most  laboriously,"  as  the  Daily  News  very  prop- 
erly states  the  case  of  the  American  Farmer,  and  farming 
on  the  English  mode  of  raising  crops.  Here  lies  all  the 
difference. 

Theoretically  right  as  the  computation  of  cost  of  rais- 
ing wheat  may  be,  counting  rent,  interest  on  capital 
invested,  the  cost  of  hired  labor,  compute  the  labor  of 
the  farmer,  and  charge  the  wear  and  tear  of  farm  imple- 
ments, etc.,  certain  it  is  that  in  practice  the  American 
wheat-raiser  works  under  the  compulsion  of  different 
motives.  He  cannot  very  easily  stay  his  hands  if  he  can- 
not cover  his  cost  according  to  the  English  mode  of  cal- 
culation. The  American  farmer  is  not  placed  differently 
from  all  the  peasant  farmers  of  continental  Europe.  He 
does  not  farm  for  a  profit,  but  for  a  living.  If  he  can  eke 
this  out  and  has  enough  of  a  salable  crop  to  cover  his 
money  wants,  he  has  reason  to  congratulate  himself. 
That  he  is  not  so  very  far  removed  from  this  goal,  despite 
the  remarkable  decline  of  corn  and  wheat  prices,  since  the 
hopeful  augury  was  given  expression  in  England,  is 
proven  by  the  Census  reports  on  mortgages.  Mortgages 


ii 


274  MONEY  AND  PRICES, 

on  farms  have  certainly  not  increased  on  old  settled 
lands.  Considering  that  a  very  large  part  of  all  mort- 
gages are  taken  on  land  as  capital  to  enable  new  settlers 
to  have  an  easier  start,  and  deducting  this  from  the  sum- 
total,  then  a  great  portion  of  the  farm  mortgages  of  ten 
years  ago  would  appear  to  have  been  paid  off.  But  even 
were  the  outlook  less  propitious,  the  wheat-raiser  would 
have  to  continue  to  raise  wheat,  the  corn-raiser  corn,  and 
sell  these  crops  in  natura  or  in  the  form  of  fattened  cattle 
and  hogs,  the  same  as  the  cotton-raiser  will  have  to  raise 
cotton,  all  for  one  and  the  same  reason.  They  work  un- 
der a  stern  compulsion  easily  apprehended. 

The  settler  on  western  lands  has  no  other  crop  which 
he  can  turn  into  money  except  wheat.  He  may  raise 
other  produce,  but  in  strictly  agricultural  settlements  this 
would  find  but  a  limited  market  among  his  neighbors, 
most  of  whom  are  situated  as  he  is. 

If  he  can  supply  himself  and  family  with  the  necessaries 
from  the  farm,  in  vegetables,  butter,  milk,  and  meat,  he 
is  well  off  indeed.  Many  of  these  even  he  has  to  pur- 
chase. Now,  how  is  he  to  raise  money  for  supplying 
himself  with  many  of  the  most  important  necessaries  of 
life  except  by  raising  a  crop  easily  turned  into  cash  ? 

But  he  has  no  heavy  outlay,  such  as  the  English  farmer. 
The  chief  farm  work  is  done  by  himself,  aided,  perhaps, 
by  members  of  his  family,  and,  possibly,  if  necessary, 
what  hired  help  he  may  require  in  harvest  time. 

The  large  farm,  producing  wheat  under  capitalistic 
management,  employs  by  the  aid  of  labor-saving  ma- 
chinery so  little  help  that,  comparative  with  the  output, 
the  labor  counts  an  insignificant  part.  There  the  cultiva- 
tion has  reached  the  point  of  an  industrial  enterprise. 
Still  it  is  the  experience  that  these  mammoth  farms  on 


MODERN  TRA  NSPOR  TA  TION  ME  THODS.  2/5 

the  long  run  go  into  smaller  holdings  with  the  growth  of 
population. 

But  whatever  the  position,  at  the  present  and  for  a  long 
time  to  come,  probably,  the  wheat-raiser  has  no  alterna- 
tive but  to  raise  wheat,  because  wheat  is  the  only  money 
crop  he  can  put  his  energies  to.  It  is  the  same  with  the 
grower  of  corn,  the  grower  of  cotton,  etc.,  each  in  its 
zone.  Hired  help  is  expensive,  difficult  to  get,  when 
needed,  at  harvesting,  even  at  high  rates,  and  so  it  is 
economy  of  labor  after  all  which  prescribes  the  system 
of  agriculture  which  the  American  farmer  has  to  follow. 

The  Modern  Methods  of  Transportation. 

Without  railroads  the  farmer  could  not  have  settled 
any  appreciable  distance  away  from  navigable  rivers.  The 
railroads  have  added  all  the  intermediate  lands  to  the 
food  supplies  of  the  world.  The  improvements  in  trans- 
portation, the  multiplication  of  lines,  keep  the  farmer  in 
easy  communication  with  his  markets. 

The  consuming  power  is  increasing,  it  is  true ;  but 
more  so  is  the  producing  power.  What  applies  to 
America,  applies  to  Australia,  applies  to  Argentina  and 
Chili ;  it  applies  to  India,  it  applies  to  Russia,  Roumania, 
and  Austro-Hungary.  They  all  produce  a  surplus  over 
the  needs  of  their  own  country.* 

They  are  all  now  in  line  of  communication,  or  are 
bringing  more  and  more  land  within  new  avenues  of  com- 
munication to  reach  the  markets  the  American  farmer  has 
to  rely  upon  for  the  sale  of  that  part  of  his  surplus  not 

*The  difficulty  of  obtaining  land  sends  the  emigrant  to  the  new  countries. 
Freed  from  the  trammels  which  tradition  and  ancient  law  have  wound  around 
land  and  its  cultivator  in  the  old  country,  he  becomes  in  his  new  and  free 
surroundings  the  leveler  of  prices  and  destroyer  of  values,  now  the  amaze- 
ment of  England  and  the  countries  of  Europe, 


276  MONEY  AND  PRICES. 

consumable  at  home,  and  which  determines  the  price. 
They  are  all  after  the  same  markets.  The  markets  are 
limited  to  a  few  countries.  The  supply  is  growing.  Here, 
as  well  as  in  the  other  countries  mentioned,  the  same 
necessities  impel  the  raising  of  a  crop  which  can  be  turned 
easiest  into  money. 

If  we  examine  into  the  extension  of  wheat-growing  in 
the  last  twenty-five  years,  and  the  increase  of  the  market- 
able surpluses,  it  is  easy  to  understand  why  wheat  prices 
have  declined,  irrespective  of  the  fall  in  the  price  of 
silver  or  any  other  monetary  consideration. 

Three  years  ago,  with  immense  crops  in  America,  the 
price  was  the  highest  for  years  because  a  failure  of  crops 
in  other  countries  had  created  a  sufficient  demand  for  the 
American  extra  supply.  Silver,  however,  had  again  begun 
its  career  downward,  in  which  it  was  temporarily  inter- 
rupted by  the  enactment  of  the  Sherman  Silver  Bill. 
Silver-paying  countries  shared  no  less  in  the  advance 
caused  by  that  shortage  in  the  wheat  crops  of  the  world 
than  gold-paying  countries.  Whatever  the  relative  price 
of  wheat  in  silver  or  in  gold  currencies,  the  actual  price 
fluctuations  the  world  over  are  the  same,  and  due  alone  to 
the  causes  stated  above  put  into  active  operation  by  the 
railroad  and  the  steamboat. 

The  steamboat  a  generation  ago  was  a  very  poor  con- 
trivance as  a  carrier  of  bulky  freight.  The  consumption 
of  coal  per  horse  power  was  so  great  and  the  speed  so 
slow  compared  to  the  present  conditions,  that  the  space 
now  available  for  this  bulky  freight  was  entirely  absorbed 
by  the  fuel  the  steamers  were  obliged  to  carry. 

The  greatest  rate  of  progress  in  these  achievements  has 
been  reached  within  the  last  fifteen  or  twenty  years,  and 
it  is  not  surprising  that  the  pressure  should  be  felt  by  the 


DIVERGENT  GRAItf  PRICES. 

English  farmer,  with  half  a  dozen  wheat-raising  countries 
unloading  their  surplus  before  his  very  gates.* 

In  cotton  the  price  had  maintained  itself  very  steadily 
up  to  1891,  although  India  and  Egypt  have  extended 
their  cultivation.  Gold-paying  America  determined  the 
price  so  long  as  the  supply  ran  even  with  the  demand.  A 
large  surplus  existing  cannot  fail  to  depress  prices. 

In  putting  cotton  and  wheat  in  comparison  we  can  see 
at  a  glance  that  the  recent  price  declines  in  these  are  due 
entirely  to  the  operation  of  the  economic  law  known  as 
Gregory  King's  law,  that  a  surplus  in  the  market  depresses 
the  price  of  a  commodity  in  the  proportion  of  that  surplus 
to  the  usual  consuming  demand. 

But  it  is  a  mistake  to  suppose  that  the  American  farmer 
has  been  equally  affected  as  the  English  wheat-producer. 
A  comparison  of  prices  and  of  transportation  rates  of 
former  times  with  those  of  recent  dates  will  show  this 
clearly.  Prices  at  terminal  points  formerly  were  widely 
divergent. 

The  English  average  price  of  wheat  for  1860  was  54 
shillings  per  quarter,  which  is  equal  to  $1.63  the  bushel. 
The  average  price  for  spring  .wheat  in  Chicago  was  97^ 
cents,  and  winter  wheat  $1.10.  For  the  same  time  the 
price  in  New  York  for  the  former  averaged  $1.22^  and  for 
the  latter  $1.38  the  bushel.  But  1860  was  a  year  of  high 
wheat  prices,  and  we  cannot  argue  very  well  from  that 
year. 

Let  us  take  1850,  with  wheat  at  $1.25  a  bushel  as  the 
average  price  in  England.  Spring  wheat  in  Chicago  aver- 

*  It  is  strange  to  speak  about  a  limit  with  a  Siberian  railroad  building  and 
millions  of  settlers  on  the  alert  for  the  new  openings.  But  Russia  itself 
with  railroads  and  general  improving  of  conditions  at  home  could  supply 
alone  and  with  ease  the  shortage  in  wheat  of  all  the  rest  of  Europe. 


278  MONEY  AND  PRICES. 

aged  65  cents  ;  winter  wheat  95  cents — an  average  price 
of  80  cents.  The  New  York  average  price  was  $1.10  and 
$1.25  respectively,  or  an  average  of  $1.17^-. 

The  influence  of  the  American  price  on  English  wheat 
prices  was  then  not  yet  appreciable.  The  farther  back 
we  go,  the  greater  independence  of  the  western  and  the 
eastern,  the  American  and  the  English  prices,  until  in 
distant  times,  the  same  as  in  backward  countries  of  to- 
day, each  country  and  section  has  its  prices  high  or  low 
simultaneously  and  entirely  independent  of  other  sections 
or  countries.  The  average  for  1846  in  England  $1.65, 
was  60  cents  in  Chicago  and  $1.10  in  New  York. 

With  the  inferior  means  of  communication  the  pressure 
of  distant  areas  of  production  could  exercise  little,  if  any, 
influence  on  prices.  Each  centre  of  population  had  to 
look  upon  a  near  source  of  supply  from  where  the  cost  of 
transportation  did  not  absorb  the  greater  part  of  the 
price.* 

The  Senate  Finance  Committee,  known  as  the  Aldrich 
Committee,  has  collected  some  valuable  statistics  of  prices 
covering  a  period  of  fifty  years. 

*  I  find  for  one  and  the  same  year  prices  to  vary  in  the  most  violent  fashion 
in  the  different  parts  of  France  ;  and  the  same  occurrence,  of  course,  is  found 
in  every  country  and  in  every  period,  conditioned  as  were  the  European 
Middle  Ages.  Thus,  for  instance,  the  price  per  Hectoliter  stands  : 

In  1428:  Troyes,  fcs.,  3.62  ;  Orleans,  fcs.,  10.92  ;  Alby,  fcs.,  58.35. 

In  1429  :  Strasburg,  fcs.,  6.40  ;  Orleans,  fcs.,  19.37  !  Alby,  fcs.,  9.72  ;   Caen,  fcs.,  2.51. 

In  1431 :  Paris,  fcs.,  7.29  ;  Alby,  fcs.,  9.72  ;  Orleans,  fcs.,  5.92  ;  Saint  Leonard,  fcs.,  1.32  ; 
Strasburg,  fcs.,  5.24  ;  Limoges,  fcs.,  14.60. 

In  1432  :  Alby,  fcs.,  10.48  ;  Limoges,  fcs.,  19.10  ;  Saint  Leonard,  fcs.,  6.67. 

In  1433  :  Alby,  fcs.,  8.76 ;  Saint  Leonard,  fcs.,  16. 

Not  alone  that  grains  vary  between  famine  prices  in  one  and  superfluity 
prices  in  another  section,  but  the  abundance  of  one  year  makes  room  to 
famine  prices  in  the  succeeding  year  in  one  and  the  same  locality,  as  is  seen 
from  the  above  statement  of  six  years'  grain  prices  taken  without  any  special 
design  by  Mr.  d'Avenel,  except  to  show  the  basis  upon  which  the  "price 
averages  "  rest. 


REDUCTION  OF  FREIGHT  CHARGES.  2?<) 

The  price  quotations  for  Chicago  wheat  in  the  early 
years  are  in  many  instances  so  low  (such  prices  as  20,  35, 
and  38  cents  the  bushel)  that  the  question  may  be  raised 
whether  some  of  the  figures  represent  more  than  tempo- 
rary quotations,  when  we  consider  that  little  would  have 
been  realized  by  the  farmer,  after  paying  charges  and 
expense  of  carrying  to  Chicago. 

But  no  doubt  the  figures  taken  from  official  sources  cor- 
rectly state  in  general  the  prices  existing.  The  average 
for  spring  wheat  from  1840  to  1845  is  about  45  cents;  for 
winter  wheat  60  cents.  The  fluctuations  are  extreme; 
prices  in  1843  vary  from  20  cents  to  75  cents  in  spring 
wheat,  and  from  45  to  85  cents  in  winter  wheat.  New 
York  prices  vary  between  87^  and  93  cents  in  spring  and 
90  cents  to  $1.20  in  winter  wheat.  The  prices  fluctuate 
far  less  violently  in  New  York  than  in  Chicago,  because 
of  the  constant  consuming  demand  at  the  former  place,  a 
distributing  centre  for  a  large  population,  while  at  the  lat- 
ter place  population  was  sparse  yet  and  the  heavy  cost  of 
freight  prevented  reaching  out  for  distant  markets. 

The  export  demand  exercised  but  little  influence  on 
prices.  The  exports  in  wheat  averaged  for  the  five  years 
ending  with  1845  but  600,000  bushels,  and  in  flour  but 
1,200,000  barrels. 

But  what  concerns  us  here  mostly  is  the  difference  in 
price  of  western  wheat  and  eastern  wheat.  Whether  we 
compare  the  prices  by  months,  or  average  the  different 
months,  we  get  to  pretty  nearly  the  same  results,  a  differ- 
ence of  about  40  cents  in  the  price  of  wheat  between 
Chicago  and  New  York.  At  the  present  time  the  differ- 
ence is  barely  5  cents  between  Chicago  and  New  York 
prices. 

The  western  farmer's  condition  has  certainly  been  im- 


280  MONEY  AND  PRICES. 

proved  by  the  ability  of  reaching  the  world's  markets  at 
a  rate  of  expenses  which,  compared  with  the  cost  of 
carriage  at  the  earlier  stages  of  railroad-building,  must  be 
considered  as  but  a  nominal  charge. 

The  through  freight  charges  on  grain  by  the  leading 
roads  from  Chicago  to  New  York  averaged  about  $1.20 
per  100  pounds  for  November,  1865  ;  they  had  fallen  in 
1870  for  the  same  month  to  60  cents,  and  averaged  at  that 
rate  till  about  1873.  Thence  in  1874  to  1 880  the  rates  fell 
to  40  and  35  cents,  and  from  there  came  down  to  rates 
varying  between  20  and  25  cents  in  1890. 

What  is  worthy  of  note  is  that  rates  of  freight  when 
once  lowered  have  never  come  back  to  old  positions. 
Free  competition  among  the  lines  insures  the  same  results 
as  an  enactment  would,  if  we  were  to  follow  the  Belgian 
precept  in  this  direction.  November  rates  are  highest,  on 
account  of  closing  navigation  and  discontinued  competi- 
tion by  lake  and  canal  routes. 

Through  freight  by  lake  and  rail  18  cents  per  bushel  in 
October,  1877,  came  down  to  7^-  cents  in  1890.  Lake  and 
canal  route  charges  in  September  and  October,  1878, 
averaged  I3|-  cents,  in  1890  only  6  cents,  per  bushel. 

Ocean  rates  have  fallen  more  noticeably  yet.  The  rates 
in  the  years  farthest  back  show  greatest  variations.  The 
freight  room  was  not  in  as  great  supply  as  at  present,  and 
high  rates  followed  greater  demand  for  tonnage. 

But  taking  the  six  months  from  July  to  January,  when 
th«  bulk  of  the  harvest  is  being  shipped,  we  average  for 
1870,  per  bushel,  15%  cents;  for  1873,  even,  25f  cents  ;  for 
1876,  16  cents;  for  1880  we  have  14  cents;  for  1884  we 
have  10  cents;  for  1888  we  have  8  cents;  for  1890  we 
have  about  4  to  5  cents,  which  is  the  average  for  1892, 
and  may  be  considered  the  general  average  rate  now. 


GAIN  TO  PRODUCER  AND  CONSUMER,  28 1 

The  rates  for  1891,  a  year  of  great  crops  here  and  a 
corresponding  demand  in  Europe,  made  freights  rule  very 
high  for  the  time  being.  But  the  average  was  not  above 
8  cents  a  bushel.  If  we  go  back  no  farther  than  1873  we 
can  state  that  a  difference  in  freight  charges  from  Chicago 
to  New  York  of  20  cents  per  bushel  over  the  present  rates 
have  accrued  to  the  eastern  consumer,  and  to  the  western 
farmer  alike.  A  further  benefit  to  the  western  farmer  and 
the  European  consumer  is  in  the  fall  of  ocean  freight  of 
fully  10  cents  in  this  period  of  about  20  years. 

We,  in  America,  certainly  have  to  take  this  margin  into 
consideration  (about  30  cents  per  bushel) — the  saving  of 
freight  to  the  consumer  of  the  farmer's  surplus,  when  we 
speak  of  the  fall  in  the  price  of  his  wheat. 

In  other  freights,  of  course,  similar  reductions  can  be 
shown.  In  cotton  the  rates  by  steamer  from  New  Orleans 
to  New  York  in  1873  averaged  60  cents  per  100  pounds  ; 
in  1880,  45  cents;  in  1892,  32  cents.  The  all-rail  rates 
from  Atlanta,  Ga.,  in  1886,  were  85  cents;  in  1893  they 
are  67  cents.  Ocean  freights  have  followed  a  similar 
course  as  in  wheat. 

If  I  were  to  bring  the  general  freight  decline  into  an 
average  figure,  I  should  say  that  the  charges  are,  all  around, 
not  much  above  one  third  of  what  they  were  about  twenty- 
five  years  ago. 

In  bulky  freight  this  element  has  always  been  a  chief 
factor  in  price-making.  The  lower  the  value  in  proportion 
to  weight,  the  greater  the  share  of  freight  in  the  price. 
Hence  we  see  what  a  great  part  this  feature  plays  in  just 
those  prices  which  have  all  along  been  used  as  the  play- 
ball  in  the  silver  argument. 


282  MONEY  AND  PRICES. 

Transportation  in  the  Past. 

Perhaps  no  other  branch  of  economic  activity  shows  so 
plainly  the  vast  advance  of  our  modern  civilization  over 
preceding  ones  as  the  modern  system  of-  transportation. 
The  periods  of  progress  of  all  nations  show  the  attention 
of  rulers  and  governing  bodies  to  the  improvement  of 
the  means  of  communication.  If  not  for  civilizing  and 
commercial  ends,  strategic  interest  sets  to  work  to  build 
roads  and  improve  waterways.  The  perfection  of  Roman 
road-building  is  attested  by  the  centuries  which  have 
brought  them  down  to  our  own  days  as  unrivalled  mar- 
vels of  construction.  Thorold  Rogers  speaks  of  the  low 
rates  of  carriage  up  to  the  sixteenth  century  in  England 
and  the  much  higher  rates  of  later  times.  He  ascribes 
this  to  the  perfect  roads  in  the  earlier  centuries,  while 
later  on  in  the  economic  stagnation  of  England  in  the 
sixteenth  and  seventeenth  centuries  they  were  left  to 
decay.  I  can  attribute  this  to  no  other  cause  than  to  the 
endurance  of  the  roads  built  during  the  Roman  invasion.* 
It  is  more  than  doubtful  that  the  English  of  the  thirteenth 
and  fourteenth  centuries  could  have  been  very  expert  in 
road-building.  But  it  is  very  probable  that  they  made 
more  of  the  existing  high  roads  by  keeping  them  in  repair, 
than  in  the  succeeding  centuries  characterized  by  strife 
and  oppression  of  the  working-classes  and  the  agricultural 
populations. 

Although  Charlemagne  had  already  taken  into  consid- 
eration the  building  of  a  canal  for  uniting  the  navigable 
parts  of  the  Danube  and  the  Rhine,  and  Lombardy  and 
Tuscany  were  traversed  with  canals  as  early  as  the  twelfth 

*  Bergier,  Histoire  des  Grands  Chemins  de  F Empire  Romain  (1622),  is 
authority  for  the  statement  that  England  had  2579  Roman  miles  of  roads, 
i,  e.,  2380  English  miles, 


FREIGHT  RA  TES  LV  THE  PAST.  283 

century,  England  did  not  see  any  canals  until  late  in  the 
eighteenth  century,  when  the  Bridgewater  Canal  was  built. 

The  writers  of  the  latter  part  of  that  century  are  full  of 
complaints  about  the  bad  land  communications.  Marshall 
says  that  in  Devonshire  in  1770  all  transportation  was 
done  on  the  pack-horse  ;  that  the  Weald  of  Sussex  was 
almost  entirely  without  roads  in  1791,  and  that  the  neigh- 
borhood of  Birmingham  saw  no  improvement  of  its  roads 
from  the  time  of  the  old  Mercian  Kingdom  to  1770. 

In  the  seventeenth  century  the  charge  for  timber, 
bricks,  hay,  corn,  as  quoted  from  the  Oxford  records  by 
Thorold  Rogers,  runs  from  8£</.  to  is.  per  ton  per  mile. 
This  is  about  fifty  times  the  present  rail  rate.  The  car- 
riage of  a  ton  of  grain  200  miles  to  any  place  of  scarcity 
was  a  charge  of  from  $i  to  $1.20  for  freight  on  every 
bushel  of  wheat  so  carried. 

To  speak  of  carriage  over  greater  distances  in  a  low- 
wage  period,  I  will  cite  a  load  of  goods  weighing  zo^cwts., 
brought  from  London  to  Smithhills  near  Bolton  in  Lan- 
cashire in  1588.  The  distance  is  197  miles.  The  charge 
is  5J.  6d.  ($1.33)  on  the  cwt.,  which  is  £5  IOT.  ($26.73)  on 
the  ton.  It  would  not  cost  the  tenth  part  to-day  to  bring 
a  ton  of  wheat  from  Chicago  to  New  York,  a  distance  five 
times  as  great.  A  load  of  hydraulic  lime  is  carried  in  1693 
from  Bishopsgate,  London,  to  Cambridge,  a  distance  of 
50  miles.  The  weight  is  26f-  cwjs.,  and  the  cost  of  car- 
riage is  64^.  8</.  ($15.74),  just  about  I s.  per  ton  a  mile.  This 
is  four  times  the  value  at  London  at  that  time. 

Carriage  by  water  was  lower,  of  course,  but  still  very 
high  in  the  light  of  the  present  day. 

In  1608,  28J-  loads  of  timber  are  shipped  a  distance  of 
22^  miles  at  a  cost  of  6*.  2d.  ($1.49)  per  load  or  ton.  The 
rate  per  mile  per  ton  is  therefore  6^  cents. 


284  MONEY  AND  PRICES. 

A  load  of  stone  carried  to  Oxford  in  1661  costs  nearly 
eight  cents  per  ton  a  mile  to  carry.  In  all  coarse  goods 
the  cost  was  easily  doubled  and  trebled  by  freight  charges 
if  carried  any  considerable  distance.  In  manufactures, 
which  were  not  carried  to  any  very  large  extent,  ex- 
cept at  the  time  of  the  fairs,  the  proportion  of  freight 
charge  to  the  value  of  the  goods  was  smaller,  but  still  it 
made  a  not  unimportant  addition  in  the  price.  It  is  easy  to 
comprehend  that  not  all  is  said,  when  merely  the  price  at 
the  place  of  production  is  mentioned  in  past  price-periods. 

But  all  this  is  in  the  memory  of  living  men,  is  the  case 
in  backward  countries  to-day,  and  was  universal  not 
more  than  fifty  or  sixty  years  ago. 


CHAPTER   XIII. 

Other  Causes  which  Made  Prices  High  in  the  Past — Changed  Conditions  in 
the  Course  of  their  Removal. 

VERY  various  are  the  causes  which  contributed  to  make 
prices  high  in  the  past.  Next  to  the  inefficiency  of  labor, 
the  stagnant  condition  of  agriculture  and  the  wretched 
means  of  communication,  we  have  to  consider  the  great 
risks  and  dangers,  the  multitude  of  exactions,  duties,  and 
other  charges  on  traffic,  the  interference  of  the  state,  the 
privileges  of  the  guilds,  the  monopolies  giving  whole  lines 
of  commerce  into  a  few  individual  or  corporate  hands,  as 
barnacles  on  trade  and  instruments  for  raising  prices. 

The  line  of  burdens  is  by  no  means  exhausted  by  the 
enumeration.  But  I  name  only  the  chief  ones  acting  on 
prices  and  carried  over  from  primitive  conditions  of 
society  into  our  days. 

The  survey  would  not  be  complete,  the  magnitude  of 
the  load  and  the  consequent  effect  of  its  removal  would 
not  be  appreciated,  did  I  not  make,  at  least,  passing  refer- 
ence to  them. 

The  Risks  of  Commerce. 

The  high  cost  of  foreign,  southern,  and  eastern  produce 
has  been  referred  to  above.  It  is  well  to  observe  that 
with  the  high  cost  of  transportation  by  the  pack-horse  or 
the  camel  over  thousands  of  miles  of  desert  and  wretched 
roads,  the  account  was  by  no  means  complete. 

285 


286  MONEY  AND   PRICES. 

The  predatory  bands  had  to  be  paid,  either  in  buying 
from  them  protection  against  other  robber  bands  or  in 
losing  the  property  and,  possibly,  life  in  defence  of  the 
property.  Up  to  the  time  of  the  discovery  of  the  sea 
route  to  India,  the  products  of  the  East  were  obtainable 
in  this  way  alone.  Cairo  and  Alexandria  were  the  trans- 
mitters. Proceeding  from  Venice  or  Genoa,  the  mer- 
chants suffered  exactions  no  less  burdensome,  though  the 
robbers  were  devout  Christians  and  did  penance  before 
the  shrine  of  the  Holy  Virgin. 

When  the  bulk  of  the  carrying  trade  took  to  the  new 
ocean  route  the  risks  were  not  diminished.  Piracy  was 
considered  an  honorable  occupation.  Elizabeth's  partner- 
ship with  the  pirates  is  a  well  authenticated  fact.  The  de- 
struction of  the  enemy's  fleet  was  a  road  to  honor  and  to 
wealth.  And  the  enemy  was  everybody  who  carried  any- 
thing worth  risking  life  to  take. 

Armed  convoys  were  therefore  a  necessary  accompani- 
ment of  the  trader's  fleet.  In  the  fifteenth  century,  Ven- 
ice had  a  regular  system  of  convoys.  The  fleets  to  Alex- 
andria were  accompanied  by  four,  to  Syria  by  four,  and 
to  the  near  shores  of  Africa  by  two  armed  galleons.  Con- 
voying was  kept  up  by  Spain  well  into  the  nineteenth 
century  for  its  silver  ships  plying  between  Spain  and 
America,  and  money  shipments  were,  as  a  rule,  made  on 
men-of-war  within  comparatively  modern  times. 

Macaulay,  in  speaking  of  the  English  navy  and  the  men 
who  manned  it  in  the  reign  of  Charles  II.,  says  : 

"  The  chief  bait  which  allured  these  men  into  the  service  was  the  profit  of 
convoying  bullion  and  other  valuable  commodities  from  port  to  port ;  for  both 
the  Atlantic  and  the  Mediterranean  were  so  infested  by  pirates  from  Barbary, 
that  merchants  were  not  willing  to  trust  precious  cargoes  to  any  custody  but 
that  of  a  man-of-war.  A  captain,  in  this  way,  sometimes  cleared  several 
thousands  of  pounds  by  a  short  voyage  ;  and  for  this  lucrative  business  he 


AtfD  f/lGff  PROFIT  XA  T£$.  287 

too  often  neglected  the  interests  of  his  country  and  the  honor  of  its  flag, 
made  mean  submissions  to  foreign  powers,  disobeyed  the  most  direct  injunc- 
tions of  his  superiors,  lay  in  port  when  he  was  ordered  to  chase  a  Sallee 
rover  or  ran  with  dollars  to  Leghorn  when  his  instructions  directed  him  to 
repair  to  Lisbon  :  and  all  this  he  did  with  impunity."  * 

This  gives  an  idea  of  trading  conditions  in  time  of 
peace.  They  continued  well  into  the  last  century.  The 
risks  in  war  time,  of  course,  were  eminently  greater.  And 
war  on  the  oceans  during  the  seventeenth  and  a  greater 
part  of  the  eighteenth  century  was  in  permanency. 

Where  such  charges  had  to  be  borne  in  regular  trading, 
and  tremendous  losses  had  to  be  encountered  on  extra 
occasions,  it  is  natural  that  compensation  was  sought  in 
high  profits.  While  now  ten  per  cent,  would  pay  the 
great  trading  houses  a  very  handsome  return,  and  five  per 
cent.,  a  mere  commission,  is  a  satisfactory  return  on  the 
turn-over  after  paying  expenses,  a  hundred  per  cent,  was 
a  regular  profit  charge  in  earlier  trading,  with,  frequently, 
much  higher  charges.  To  this  day  "  A  Dutchman's  one 
per  cent.,"  in  popular  parlance,  means  one  hundred  per 
cent.  As  the  Dutch  had  the  carrying  trade  of  the  East 
for  a  long  time,  it  is  easy  enough  to  see  how  they  meas- 
ured their  profits,  and  what  the  people  thought  about  it.f 


*  Macaulay,  History  of  England,  ch.  iii. 

f  A  hundred  per  cent,  was  recognized  in  the  capitularies  of  Charlemagne 
as  the  legitimate  rate  of  merchants'  profits.  In  the  middle  ages,  as  in  all 
times  of  undeveloped  trade,  the  rate  of  profit  is  high.  Smallness  of  the 
transactions  and  the  limited  purchasing  capacity  of  the  people  make  this  a 
matter  of  course. 

The  merchants  at  the  fair  at  Kabul  consider  a  profit  of  three  to  four  hun- 
dred per  cent,  not  excessive,  according  to  Ritter  (Erdkunde,  vii.,  24^). 

An  example  of  the  profit  of  caravan  trading  is  expressed  by  an  instance  of 
ten  million  piasters  brought  back  from  the  Soudan  in  return  for  one  mil- 
lion of  merchandise  taken  there  by  a  caravan  from  Morocco. 


283 

For  the  greater  part  of  the  seventeenth  century  the  carry- 
ing trade  lay  in  their  hands.  In  1669  Colbert  estimates  the 
vessels  of  all  merchant  marines  as  20,000,  of  which  he  al- 
lows 15,000  to  16,000  to  the  Dutch,  and  only  600  to 
France.*  The  blame  for  raising  prices  by  the  exercise  of 
monopoly  lies,  therefore,  at  their  doors. 

The  Carrying  Trade. 

In  dealing  with  this  chapter  of  the  price  history  of  the 
time  most  important  for  our  discussion,  it  is,  therefore, 
necessary  to  speak  of  the  Dutch  more  than  of  other 
nations.  This  does  not  by  any  means  imply  that  these 
other  nations  were  more  modest  in  their  demands  or  more 
moderate  in  the  treatment  of  the  weak  peoples  whom 
they  made  tributary  to  their  commerce  or  victims  of  their 
avarice.f  The  Dutch,  being  the  most  refined  and  most 
civilized  trading  nation  of  Europe  of  the  time,  were  prob- 
ably not  more  exacting  or  cruel  than  those  from  whom 
they  had  taken  the  trident  or  those  who  were  to  succeed 
them  in  the  following  century.  Still  their  grasping  and 
grinding  tendency  is  a  matter  of  history,  and  can  by  no 
means  find  extenuation. 

To  give  an  example  of  the  spirit  which  animated  the 
great  trading  companies,  I  cite  the  fact  that  in  order  to 

*  An  idea  of  the  preponderance  of  the  Dutch  carrying  trade  and  the  insig- 
nificance of  all  other  is  conveyed  by  the  statement  of  Hume,  according  to 
which  the  Dutch  at  about  the  end  of  the  reign  of  James  I.  traded  to  Eng- 
land with  600  ships,  England  to  Holland  with  60  only. 

f  In  example,  the  treatment  of  the  Irish  by  the  British  in  the  seventeenth 
and  eighteenth  centuries,  the  butcheries,  the  confiscation  of  their  lands 
under  the  appropriate  cry  "to  Hell  or  to  Connaught,"  the  destruction  of 
the  Irish  industries  by  acts  of  Parliament,  and  many  other  shining  proofs  of 
the  spirit  which  filled  that  period. 


VICIOUS   TRADING  METHODS.  2&) 

advance  the  price  of  spices,  the  Dutch  in  1652  destroyed 
the  shrubs  and  trees  on  the  spice  islands.  They  paid  the 
native  rulers  and  their  dependants  for  destroying  trees 
which  might  become  accessible  to  others,  and  thus  inter- 
fere with  their  monopoly.* 


*  "  I  assign  the  fact "  (of  the  rising  price  of  spices  in  the  middle  of  the  sev- 
enteenth century)  "  to  the  monopoly  which  the  Dutch  had  obtained  on  the 
spice  islands  to  the  energetic  means  which  they  took  to  secure  or  extend 
the  monopoly,  and  especially  to  the  practice  they  adopted  of  bringing  or 
forcing  the  native  princes  to  destroy  all  the  trees  to  which  possible  inter- 
lopers might  have  access.  We  are  expressly  told  that  the  English  had 
numerous  factories  in  the  spice  islands,  that  they  abandoned  some  of  them 
and  were  squeezed  out  of  others  by  the  Dutch.  Now,  it  will  not  be  sur- 
prising that  the  East  India  merchants  were  able  to  instigate  that  bitter  hos- 
tility to  Holland  which  can  be  found  in  all  seventeenth-century  English 
literature  and,  indeed  onwards,  and  to  foment  those  prejudices  to  which 
Selden,  Swift,  Arbuthnot,  and  Defoe  gave  expression.  I  feel  sure  that  the 
extreme  unfairness  with  which  the  English  Government  treated  Holland 
was  the  outcome  of  that  unhappy  commercial  policy  under  which  Dutch 
trade  was  more  unwise  and  grasping  than  even  the  English  and  Spanish 
colonial  systems  were."  (Thorold  Rogers,  Hist,  of  Agr.  and  Prices,  vol. 
v.,  p.  454-) 

Holland  was  one  of  the  great-powers  of  the  seventeenth  century.  She 
had  the  means  still  in  1704  to  keep  an  army  of  160,000  men  (Van  Noorden, 
History  of  the  Eighteenth  Century).  But  Holland  shared  the  fate  of  all 
trading  republics.  Victors  against  tremendous  odds  so  long  as  the  spirit  of 
freedom  and  independence  is  active  and  arms  rich  and  poor  to  sacrifice  life 
and  property  in  the  defence  of  the  fatherland.  They  go  to  pieces  when 
wealth  creates  an  inseparable  gulf  between  rich  and  poor,  when  wars  of 
rapacity  and  conquest  are  undertaken,  and  the  defence  of  the  country,  even, 
is  left  to  mercenaries  and  hired  soldiers.  Wealth  keeps  growing,  profits  are 
big,  Amsterdam  is  the  banker  of  the  world,  until  London  is  ready  to  take 
hold  of  the  strong  box  of  Europe.  But  the  Tromps,  the  De  Ruyters,  dis- 
appear. No  more  deeds  of  valor  like  that  of  the  self-organized  fleet  of  fish- 
ermen, who  take  it  into  their  heads  to  sail  into  a  Spanish  harbor  and  de- 
stroy the  Spanish  fleet  collecting  there  against  their  country.  Henceforth 
the  elements  are  expected  to  do  the  fighting,  and  the  jealousies  of  the 
powers  do  the  rest  in  preserving  the  indei>endence  of  Holland. 

'9 


MONEY  AND  PRICES. 

The  foreign  commerce  of  the  maritime  nations  in  the 
seventeenth  century  soon  became  absorbed  by  stock  com- 
panies. Privileges  and  trading  monopolies  were  granted 
with  a  lavish  hand  by  the  kings  to  favorites,  or  bought 
from  the  crown,  or  obtained  through  bribery  and  corrup- 
tion. But  although  the  gross  profits  were  enormous,  as 
the  original  cost  was  little  more  than  the  cost  of  cultiva- 
tion, gathering,  and  getting  ready  from  the  place  of  em- 
barkation of  the  produce  of  countries  in  a  low  state  of 
economic  development,  and  the  prices  were  so  much 
higher  than  they  are  to-day,  as  shown  in  some  of  the  pre- 
vious chapters,  yet  the  net  results  were  by  no  means  as 
satisfactory  to  the  stockholders  as  would  appear  from  a 
mere  consideration  of  these  facts.  A  French  writer  in 
1769  gives  a  list  of  fifty-five  monopoly  companies  for 
foreign  commerce  which  had  failed.  The  Dutch  East 
India  Company  paid  987  per  cent,  in  dividends  from  1605 
to  1648.  But  from  1613  to  1693  its  total  net  profits  did 
not  exceed  48.3  millions  of  florins,  equalling  about  10  per 
cent,  of  its  capital,  per  annum.  From  1693  the  losses  ex- 
ceeded the  gains.  Up  to  1779  the  former  reached  85 
millions  of  florins,  and  when  it  went  to  pieces  in  1794,  the 
company  was  found  with  liabilities  of  127,553,280  florins, 
and  assets  of  only  15,287,832  florins.  The  English  East 
India  Company  paid  during  most  of  the  time  of  its  ex- 
istence an  annual  dividend  of  10  per  cent.,  from  1791 
regularly  io|-  per  cent.  But  in  1835  its  liabilities 
amounted  to  .£31,326,000,  and  its  assets  to  ^19,649,399. 

What  contributed  so  much  to  these  unsatisfactory 
results  lay  chiefly  in  the  nature  of  these  monopolies, 
which  fostered  narrow  and  grasping  characters,  and  an 
eagerness  for  gain  that  overshadowed  all  other  considera 
tions.  Their  cruel  treatment  of  the  natives,  where  they 
exercised  political  power,  is  well  known,  and  caused  the 


MONOPOLISTIC   TRADING  ERA.  2$1 

mother  country  frequently  to  interfere  and  abridge  their 
rights  long  before  they  were  abolished. 

The  officers  of  the  companies  used  their  places  as  means 
for  enriching  themselves.  Since  the  middle  of  the  seven- 
teenth century  the  Dutch  had  no  other  end  in  view  in 
entering  the  service  of  the  company,  and  the  practice  of 
making  frequent  changes,  adopted  in  the  beginning  of 
the  eighteenth  century,  did  not  diminish  the  abuse.  Be- 
sides, they  traded  on  their  own  account,  to  the  neglect 
of  the  interests  of  the  company.  The  salaries  were  poor, 
and  all  prohibitive  injunctions  did  not  avail  against  this 
abuse  of  a  trust. 

The  frequent  loss  of  vessels  was  ascribed  to  a  large 
extent  to  overloading  on  private  account.  The  running 
into  different  ports  to  dispose  of  the  goods  of  this  under- 
hand traffic  not  alone  required  nearly  half  as  many  more 
ships  than  necessary  for  the  trade  of  the  company,  but 
also  extended  the  return  time  to  unusual  and  wholly 
unnecessary  length.  The  vessels  of  the  English  East 
India  Company  required  eighteen  instead  of  eleven 
months  from  China  to  Europe,  because  the  officers  and 
crew  traded  in  all  the  ports  along  the  route.  The  freight 
per  ton  amounted  to  six  times  the  amount  it  would  have 
cost  if  carried  by  private  shippers.  As  all  foreign  com- 
merce, and  chiefly  the  eastern  and  southern  trade,  down 
to  a  comparatively  recent  period,  lay  in  the  hands  of 
these  monopolies,  the  above  recital  of  conditions  under 
which  it  was  conducted,  easily  explains  a  very  important 
element  in  the  history  of  high  prices  in  the  past. 

Monopolies  and  Guilds. 

The  raw  materials  of  industry  brought  from  distant 
countries  were  made  so  excessively  dear,  partly  by  the 


292  MONEY  AND  PRICES. 

natural  conditions  of  trade  and  transportation,  and  partly 
by  the  exercise  of  grinding  monopoly,  that  it  remains  a 
surprise  that  so  great  a  traffic  in  them  could  be  maintained 
prior  to  the  introduction  of  a  new  industrial  system,  and 
the  abolition  of  burdens  which  mistaken  social  and  gov- 
ernmental views  had  imposed  upon  industry  and  com- 
merce, or  decaying  mediaeval  conditions  had  left  them 
saddled  with. 

But  these  taxes  on  the  material  were  left  in  the  shade 
by  the  trammels  on  industrial  production  still  in  operation 
in  parts  of  Germany  up  to  the  middle  of  this  century, 
according  to  my  own  recollection,  and  in  Bavaria  to  a 
later  day  even. 

First  of  all,  the  privileges  of  the  trade-guilds  were  of 
such  a  nature  that  they  gradually  developed  from  the 
most  beneficial  civilizing  and  liberalizing  institutions  of 
the  Middle  Ages  into  burdensome  and  reactionary  organ- 
izations, retarding  progress  and  preventing  the  introduc- 
tion of  improvements. 

F.  von  Schroeder,  Schatz-und  Rentkammer,  1686,* 
calls  them  "  die  vermaledeiten  und  als  die  aergste  Pest 
von  ganz  Deutschland  verfluchten  Zuenfte,"  f  and  names 
them  as  the  cause  why  manufacturing  industries  could  not 
come  up.  The  Diet  frequently  threatened  to  suppress 
them.  But  outside  of  Prussia  things  remained  as  they 
had  been  for  a  good  long  time  far  into  the  present  cen- 
tury. An  exception  of  this  was  in  the  trans-Rhenan 
provinces.  There  the  powers  left  the  Code-Napoleon  in 
operation  as  a  memento  of  the  sway  of  modern  enlighten- 
ment against  ante-revolutionary  conditions  restored  to  the 

*  Roscher,  Wm.,  ATat.  Oek.  d,  Handcls  und  GtWfrbJltisses,  §  134. 
f  "  The   damnable    trade-guilds    cursed    by  all    Germany   as   its   worst 
plague." 


DEGENERACY  OF  THE  GUILDS.  293 

rest  of  Germany  by  the  rulers  in  grateful  recognition  of 
the  services  of  the  people  in  the  war  for  freedom. 

In  Saxony,  prior  to  the  introduction  of  liberty  of  trade, 
no  fewer  than  seven  trade-guilds  disputed  before  the 
courts  in  the  exercise  of  the  right  of  making  skates.  In 
1849  tne  town-guilds  petitioned  for  a  prohibition  of  the 
manufacture  of  window-frames  in  the  country,  because  the 
towns  were  unable  to  compete  on  account  of  the  division 
of  the  work  between  the  glaziers,  the  locksmiths,  the  car- 
penters, and  the  painters — who  were  separated  by  impas- 
sable barriers,  while  in  the  country  none  of  these  trammels 
existed. 

If  by  a  change  of  fashion  a  trade  lost  its  markets,  those 
practising  it  were  prevented  by  the  guild  regulations  from 
entering  even  one  most  nearly  related  to  it. 

In  the  last  century  the  shoemakers  of  Bremen  carried 
the  prohibition  of  bringing  shoes  from  outside  to  Bremen. 
This  applied  even  to  the  fairs.  Foreign  and  German 
states  took  retaliatory  measures.  But  the  guilds  declared 
that  they  would  rather  forego  all  foreign  custom  than 
have  their  home-monopoly  infringed  upon  to  the  slightest 
degree. 

But  France,  before  Turgot's  time,  seems  to  have  been 
the  ideal  of  trade  restriction  and  monopoly.  The  division 
into  branches  could  scarcely  be  carried  farther.  The 
reason  is  that  the  state  made  the  granting  of  concessions 
and  privileges  a  source  of  revenue. 

Colbert  had  certainly  far-reaching  views  for  his  time. 
His  endeavor  to  improve  the  finances  and  to  raise  revenue 
was,  of  course,  paramount.  He  knew,  however,  that  this 
could  not  be  done  except  by  raising  the  industrial  status 
of  the  kingdom,  which  was  very  low  when  he  took  charge 
of  affairs.  How  he  succeeded  is  a  matter  of  history.  If  he 


2Q4  MONEY  AND  PRICES. 

introduced  new  burdens,  he  certainly  abolished  a  great 
many  others,  or  tried  to  reduce  them  to  a  less  oppressive 
point. 

Had  not  an  ambitious,  vain,  and  profligate  king 
squandered  the  resources  of  the  kingdom  in  attempts 
upon  neighboring  countries,  there  is  little  doubt  that 
many  of  Colbert's  measures  would  have  been  reduced  to 
much  milder  form.  The  necessities  increasing  after  his 
death  made  the  seeds  planted  by  Colbert  blossom  luxuri- 
ously. When  the  war  with  Holland  broke  out,  Colbert 
himself  made  the  taxing  of  corporations  a  source  of  in- 
come. He  collected  a  tax  .from  all  trade-guilds  for  the 
confirmation  of  their  privileges,  and  ordered  that  all  trades 
should  organize  themselves  into  guilds.  In  consequence, 
the  Paris  guilds,  numbering  60  in  1674,  had  increased  to 
the  number  of  124  by  1691.  On  the  principle  "  that  the 
king  alone  had  the  right  of  creating  masters  of  a  craft," 
that  is  to  say,  that  every  one  owed  to  the  king  alone  the 
right  of  exercising  his  trade,*  an  edict  was  promulgated  in 

*  It  is  necessary  in  order  to  understand  the  spirit  of  the  seventeenth  and 
of,  at  least,  the  first  half  of  the  eighteenth  century  to  remember  that  the  king 
claimed  everything  as  his  own.  Absolutism  claimed  the  right  of  ownership 
over  life  and  property  of  the  individual.  The  individual  itself  had  no  con- 
ception yet  of  the  idea  of  personal  freedom  and  equality  under  the  law. 
This  is  a  matter  of  later  growth.  To  feudalism  the  idea  was  foreign.  The 
independence,  rights,  and  freedom  of  the  town,  the  community,  the  prov- 
ince, if  you  choose,  were  jealously  guarded  and  defended.  Every  one  of 
the  estates,  states,  and  communities  exercised  its  own  jurisdiction  and  de- 
fended with  zeal,  perhaps,  the  rights  of  its  subjects  or  members  against  the 
encroachment  of  the  king  or  the  of  rising  dynastic  houses.  But  every  person's 
minutest  doings  were  subject  to  carefully  prepared  rules  and  regulations. 
The  guild  was  at  all  times  a  ready  regulator  of  every  detail  in  the  life  of  a 
member  of  a  craft.  The  individual  was  well  trained  in  the  rule  of  submis- 
sion to  the  dictation  of  a  superior  body,  though  himself  a  voting  member  of 
it  with  full  rights  and  privileges.  With  the  decay  of  medievalism  in  the 


THE  EXTORTIONS  OF   THE  STATE.  295 

1691  by  which  every  one  coming  to  be  a  master  had  to 
pay  a  tax  to  the  state,  varying  from  ten  to  forty  livres 
according  to  the  importance  of  his  trade.  The  guild- 
master's  office  was  made  hereditary  and  purchasable.  And 
this  was  considered  an  improvement  over  previous  condi- 
tions. 

The  abuses  of  the  guilds  had  become  a  crying  evil. 
The  extreme  prolixity,  the  high  dues,  the  expense  of  the 


seventeenth  century  and  the  breaking  up  of  the  feudal  territorial  forms  of 
government,  the  centralization  under  the  crown  and  the  introduction  of  ab- 
solutism became  a  matter  of  course.  No  one  at  the  time  found  the  state- 
ment of  Louvois  preposterous  in  his  political  testament  addressed  to  the 
king  :  "  All  your  subjects,  whoever  they  may  be,  owe  to  you  their  persons, 
their  goods,  their  blood,  without  the  right  of  claiming  anything.  Sacrificing 
all  to  you,  they  give  you  nothing,  as  it  all  belongs  to  you."  In  his  instruc- 
tions to  the  Dauphin,  Louis  XIV;  says  :  "  The  kings  are  absolute  lords  and 
have,  naturally,  the  full  and  free  disposition  of  all  possessions."  ("  Les  rois 
sont  seigneurs  absolus  et  ont  naturellement  la  disposition  pleine  et  libre  de 
tous  les  biens,  qui  sont  posse'des.") 

The  crown's  prerogatives,  extending  over  almost  everything,  were  soon  an 
important  instrument  of  taxation.  Monopolies  and  privileges  of  commerce 
were  farmed  out  with  rights  to  the  possessors  over  the  individual  barely  con- 
ceivable in  our  days.  In  England  even,  private  persons  in  control  of  a 
monopoly  could  penetrate  into  the  interior  of  houses.  Those  in  possession 
of  the  saltpetre  monopoly  collected  regular  tribute  from  those  who  would  be 
free  from  vexatious  visitations,  etc. 

The  character  of  the  system  is  well  illustrated  by  the  fact  stated  in  Lin- 
gard's  History  of  England  that  the  new  monopolies,  which  Charles  I.  created 
*nd  gave  to  regulated  companies,  paid  a  net  revenue  to  the  state  of  ;£i5O°, 
•  ut  to  the  companies  ,£200,000. 

A  system  of  taxation,  in  the  modern  sense,  was  absent.  For  a  long  time 
yet  the  officers  of  the  state  were  made  to  pay  themselves  by  way  of  levies  on 
the  unfortunate  inhabitants.  The  large  incomes  of  many  of  the  high  charges 
without  having  fixed  salaries  shows  a  system  of  administration  as  now  only 
found  in  Turkey  and,  possibly,  Russia  in  modern  Europe.  The  effect  upon 
prices  of  all  this,  no  matter  how  legitimate  in  descent  such  a  system  of  gov- 
ernment, is  easily  understood, 


296  MONEY  AND  PRICES, 

masterpiece,  and  the  feasting,  as  part  of  it  and,  in  fact,  of 
every  event  of  importance  in  the  guild,  and  the  intriguing 
connected  with  electing  the  guild  master,  would  seem  to 
have  made  the  new  arrangement  a  change  to  the  better. 
But  the  thing  was  merely  a  financial  scheme.  An  edict 
issued  by  the  Council  of  State,  in  1693,  gave  the  guilds 
the  right  to  purchase  back  their  old  privileges.  Louis 
XIV.'s  financial  measures  were  continued  on  this  line. 
All  offices  were  purchasable.  Those  relating  to  trade 
and  industry  were  multiplied  ad  infinitum  to  be  sold  for 
cash. 

As  an  example  : 

"  In  October,  1704,  the  king  created  'inspecteurs  generaux,  commissaires- 
visiteurs  et  controleurs  des  manufactures  des  draps  et  toile  et  gardes-con- 
cierges.' In  December,  of  the  same  year,  these  offices  were  abolished  again 
on  the  payment  by  the  guilds  of  1,200,000  livres."  * 

Industrial  Regulation  by  the  State. 

The  multiplication  of  offices  was  carried  on  so  wildly 
that  it  was  found  on  various  occasions,  that  the  same 
offices  had  been  created  twice  over.  These  offices  were 
all  direct  taxes  upon  the  guilds.  They  were  responsible 
for  their  payment.  Neglect  was  followed  by  abolition  of 
their  privileges.  The  admission  of  masters  by  the  state, 
on  payment  of  the  official  tax,  soon  brought  contumacious 
•guilds  to  terms.  The  result  of  all  this  was,  that  the  guilds 
overburdened  with  taxes,  which  all  fell  heavily  on  produc- 
tion, were  forced  to  make  admission  more  and  more  ex- 
pensive and  difficult  to  obtain.  Besides  the  taxes  directly 
borne  by  the  members,  the  guilds  were  all  heavily  in  debt ; 
some  of  the  Paris  guilds,  by  the  middle  of  the  eighteenth 

*  Henry  W.  Farnam,  Die  innere  franzoesische  Gewerbegolitik  von  Colbert 
pis  Turgol" 


ABSOLUTISM  AND  PATERNALISM.  297 

century  as  high  as  400,000  to  500,000  livres.*  The  debts 
of  all  the  guilds  of  France  were*  estimated,  in  1758,  at 
30,000,000  livres. 

The  many  technical  improvements  introduced  in  the 
course  of  the  eighteenth  century  gave  rise  to  intermin- 
able contentions  about  the  infringement  of  one  trade  upon 
the  privileges  of  another.  The  courts  were  filled  with  ap- 
plications for  redress.  The  annual  expense  of  the  guilds 
of  Paris  on  this  head  were  estimated  by  Savary  as 
amounting  to  from  800,000  to  1,000,000  livres.  In  one 
year  not  less  than  30,000  cases  were  found  pending  ;  some 
of  course  of  ancient  date.  The  tailors  and  clothes-menders 
had  been  in  legal  dispute  since  the  year  1530,  about  the 
right  of  the  latter  to  make  new  clothes.  To  show  the 
kind  of  vexatious  restrictions  which  hampered  produc- 
tion, I  mention  the  case  of  the  cloth  weavers  of  St.  L6, 
who  brought  suit  against  those  of  Fouquieres  in  1721. 
The  complaint  was  that  the  latter  made  their  cloth  one 
aune  wide  and  that  the  law  of  1669  gave  them  the  right 
to  only  five  eighths. 

The  regulations  seriously  interfered  with  the  expansion 
of  trade.  Foreign  demand  could  not  well  be  satisfied  by 
a  trade  which  was  hampered  at  every  turn  by  ancient 
prescriptions  as  to  width,  texture,  number  of  threads  in 
the  chain,  finishing,  dyeing  and  so  on.  Up  to  the  middle 
of  the  century  the  severity  of  the  law  and  the  arbitrariness 
of  its  execution  grew  in  intensity.  As  far  back  as  the 
fourteenth  and  fifteenth  centuries,  I  find  that  Ulm,  one 
of  the  centres  for  the  manufacture  of  woollen  cloth  and  fus- 
tian, had  official  cloth  inspection.  The  piece,  not  up  to 
the  regulation,  was  cut  into  three  lengths.f  Strassburg 

*  Savary,  Dictionnaire  de  Commerce,  I7(ii. 

f  See  Eugen  Nuebling,  Ulm's  Bawwoll-industrie  im  Mitt<lalt<r, 


298  MONEY  AND.    PRICES. 

and  other  centres  had  similar  regulations.*  This  was  not 
to  hamper  trade  but  to  promote  it.  Ulm  did  an  enor- 
mous exporting  trade  to  the  north,  south,  and  east.  It 
was  very  proud  of  its  trade-mark.  The  cloth  of  Ulm  was  of 
such  repute  that  the  stamp  of  the  town  added  fully  twenty- 
five  percent,  to  the  value  of  cloth  not  so  stamped.  Many 
suits  were  brought  to  the  Imperial  Court  for  protection 
against  pirating  rivals.  The  cutting  of  the  cloth  was  to 
prevent  its  exportation  and  thus  prevent  any  lowering  of 
the  high  standard  abroad.  With  slight  loss  to  himself, 
the  weaver  could  retail  it  at  home.  Here  the  town  and 
the  guild  co-operated  for  the  preservation  of  the  best  in- 
terests of  the  trades  upon  which  the  greatness  and  pros- 
perity of  the  free-towns  were  built. 

Not  so  in  the  time  of  absolutistic  government.  Here  the 
interference  of  the  state  was  simply  nothing  but  "  1'  etat 
c'est  moi,"  paternalism  run  mad,  because  not  tempered  by 
regard  for  the  good  of  the  people  it  may  have  been  origi- 
nally intended  to  benefit. 

In  the  year  1717,  a  law  was  promulgated  by  which  a 
reduction  in  the  number  of  warps  in  the  chain  was  made 
the  subject  of  a  fine  varying  according  to  the  degree  of 
the  omission.  Beyond  a  certain  degree  of  inferiority  the 
cloth  is  confiscated  and  cut  to  pieces.  In  1729,  however, 
the  law  is  made  public  that  all  cloth  not  coming  up  to 
the  full  width  is  to  be  confiscated  and  cut.  Even  cloth 
made  too  long  is  subjected  to  a  fine.  In  the  year  1719 
it  is  ordained  that  all  looms  not  up  to  the  regulations 
are  to  be  changed  or  rebuilt  according  to  the  official 
standard.  The  law  of  1729  says  simply,  that  the  imple- 
ments not  coming  up  to  the  mark  shall  be  destroyed.f 

*  G.  Schmoller,  Die  Strassbur-ger  Tucher-und  Weberzunft. 
\  "  Les  dits  rots  et  lames  seront  rompus  et  brises  en  presence  de  1'  inspec- 
teur  des  manufactures," 


LIBERALIZATION  DATING  FROM   TURGOT.        2O/) 

These  stringent  laws,  burdensome  and  preventive  of  a 
beneficial  growth  of  industry  and  trade,  proved  abortive 
in  the  very  particulars  which  they  were  intended  to 
protect.  The  complaints  of  fraud  in  manufactures  mul- 
tiply, and  decline  of  trade  is  made  a  general  preamble 
in  ordinances  calling  upon  the  officers  to  enforce  the 
regulations. 

From  about  the  year  1750  a  relaxation  sets  in.  The 
Economists  begin  to  make  their  influence  felt.  The 
opposition  against  what  we  to-day  call  "  Colbertism " 
manifests  itself.  One  by  one  the  barriers  are  lowered, 
until  Turgot,  in  his  reform  acts,  speaks  the  great  redeem- 
ing word  for  which  the  ages  had  been  waiting  and  warring. 
With  the  fall  of  Turgot,  it  was  undertaken  to  put  many 
of  the  old  obstructions  up  again,  not  to  make  progress  too 
fast.  But  on  the  whole  trade  remained  free  fom  the  old 
interferences,  and  in  the  act  of  1791  the  Constituent 
Assembly  put  a  resting  epitaph  on  the  remains.  Never- 
theless it  has  ever  since  been  the  anxious  endeavor  of  a 
confused  statesmanship  to  resuscitate  it,  and  set  it  up 
again  in  the  place  of  the  young  freedom  under  whose 
sway  the  world  is  blossoming  into  a  state  of  unexampled 
and  otherwise  impossible  prosperity. 

The  trade  of  the  past  was  trammelled  and  hindered  in 
every  conceivable  way.  To  enumerate  the  risks  and 
burdens  a  commodity  had  to  carry  from  the  distant  place 
of  production  would  exhaust  the  whole  vocabulary  of  com- 
merce. To  sketch  them  even  briefly  would  fill  a  respect- 
able volume.  I  have  contented  myself  with  giving  an 
outline  of  the  most  comprehensive  ones,  such  as  were 
calculated  to  enhance  prices  most  effectively.  It  remains, 
however,  to  call  attention  to  the  most  grievous  instru- 
ment for  increasing  the  prices  of  commodities : 


3OO  MONEY  AND  PRICES. 

Duties  and  Taxes. 

I  have  pointed  out  in  another  part  of  this  chapter  the 
burdens  laid  upon  commodities  by  the  exercise  of  the 
taxing  power  possessed  by  the  lords  of  the  highway  on 
land  and  on  sea.  The  modern  state  has  relieved  the 
knight  of  the  duty  of  protecting  the  caravan  of  trade 
from  his  covetous  brother.  It  assumes  this  duty  as  a 
right,  and  puts  a  tax  upon  commodities  when  they  enter 
the  boundaries  of  the  state.  In  countries  where  the 
boundaries  of  several  states  could  easily  be  traced  from  a 
church  steeple  in  a  straight  line,  as  in  Germany,  during 
the  years  of  the  old  Confederation,*  for  instance,  this  was 
not  a  light  burden — nor  were  other  dues  to  state,  town- 
ship, and  commune.  Tolls,  dues,  and  taxes  for  bridges, 
roads,  rivers,  and  canals  were  collected  at  every  crossing. 
The  navigation  of  the  Main,  Rhine,  Danube,  the  Elbe,  and 
Scheldt  has  been  made  free  from  duties  only  within  com- 
paratively recent  times.f  The  tax-gatherer  had  his  hand 
open  all  the  time.  The  tollgate  was  always  in  your  way. 

*  Up  to  1866  from  the  steeple  of  the  cathedral  at  Frankfurt  one  could  look 
into  the  territories  of  Nassau,  Electoral  Hesse,  the  Grand  Duchy  of  Hesse, 
the  principality  of  Homburg,  and  Frankfurt  itself,  all  exercising  the  right  of 
sovereignty  and  of  independent  taxation  in  customs  matters,  up  to  the  time 
of  the  creation  of  the  German  Zollverein. 

f  In  the  building  of  the  Cathedral  of  Xanten  the  stone  had  to  be  brought 
from  the  "  Siebengebirge."  It  was  carried  by  ship  on  the  Rhine  from  And- 
ernach  to  Xanten,  a  distance  of  less  than  a  hundred  English  miles.  Duties 
were  collected  on  transit,  during  the  passage  at  Bonn,  Bredestrom,  Duessel- 
dorf ,  Rheinberg,  Kaiserwerth,  and  Buederich.  Though  in  the  two  first  places 
relief  from  paying  duties  had  been  obtained  through  the  Count  of  Geldern, 
the  duties  summed  up  19  gold  florins  (about  $41.00)  on  a  cargo  valued  at  95 
florins,  or  about  20  per  cent. 

Though  this  refers  to  the  fifteenth  century,  it  describes,  with  equal  force, 
conditions  existing  in  comparatively  modern  times. 


THE  RISE   OF  PROTECTIONISM.  30! 

It  was  certainly  a  very  great  advantage  to  trade,  and  an 
important  step  in  advance,  that  Colbert  reduced  the  inter- 
ference of  the  customs  officers  to  the  wider  circle  of  the 
national  boundary.  Up  to  then,  1664,  the  provinces  had 
levied  taxes  on  imports  and  on  exports.  In  the  preamble 
to  his  edict,  in  pointing  to  this  meritorious  act  of  the 
king,  he  condemns  in  very  energetic  language  the  nefari- 
ous character  of  this  system  of  taxation,  and  the  chaos 
which  was  its  natural  consequence. 

The  most  serious  effect  of  customs  taxation  on  prices 
was  produced  by  the  system  of  fostering  home  industries 
by  protective  tariffs.  It  existed  previous  to  that  time. 
Many  kings  and  states  put  considerable  duties  on  manu- 
factured products  from  abroad,  and  prohibited  the  expor- 
tation of  raw  materials.  But  in  general  it  may  be  said 
that  duties  were  more  in  the  nature  of  revenue  duties, 
and  were  collected  on  imports  and  exports  alike.  The 
parliamentary  grants  to  Elizabeth  and  James  I.  were  5 
per  cent,  on  imports  and  on  exports.* 

With  Colbert  the  system  expanded  from  decade  to 
decade,  and  it  soon  became  the  prevailing  principle  for 
all  Europe.  Colbert  himself,  here  as  well  as  in  his  views 
concerning  the  management  of  guilds  and  trades,  had 
very  moderate  ideas.  He  held  that  protective  tariffs  were 

*  "The  exports  of  England  from  Christmas,  1612,  to  Christmas,  1613, 
are  computed  at  .£2,487,435,  the  imports  at  .£2,1.41,151,  so  that  the  balance 
in  favor  of  England  was  .£346,284.  But  in  1622  the  exports  were 
£2,320,436,  the  imports  £2,619,315,  which  makes  a  balance  of  £298,879 
against  England." — "  As  the  annual  imports  and  exports  together  rose  to 
near  five  millions,  and  the  customs  never  yielded  so  much  as  .£200,000 
a  year,  of  which  tonnage  made  a  part,  it  appears  that  the  new  rates  affixed 
by  James  did  not,  on  the  whole,  amount  to  one  shilling  in  the  pound,  and, 
consequently,  were  still  inferior  to  the  intention  of  the  original  grant  of  Par- 
liament."— David  Hume,  History  of  England,  vol.  iv. 


3O2  MONEY  AND  PRICES. 

a  bad  means  to  a  good  end,  which  ought  to  be  got  rid  of 
as  soon  as  it  had  fulfilled  its  mission.  To  the  syndics  of 
Lyons,  who  came  to  thank  him  for  the  aid  given  to  their 
industries,  he  replied,  bluntly,  that  they  would  do  well  if 
they  considered  his  favors  only  as  crutches  by  whose  aid 
to  learn  quickly  how  to  walk  by  themselves,  and  that  he 
intended  later  on  to  abolish  the  duties  again.* 

The  exigencies  of  the  state  did  not  permit  him  to  carry 
out  this  intention.  But  had  he  lived  to  the  present  day, 
he  would  have  found  that  manufacturers  never  learn  to 
walk  alone  so  long  as  the  state  is  willing  to  furnish 
crutches. 

The  Effect  of  Protectionism  on  Prices. 

The  effect  of  the  system,  however,  is  very  pernicious, 
because  not  alone  the  prices  of  imported  articles  are 
enhanced,  but  also  the  prices  of  all  corresponding  articles 
produced  at  home.  These  in  the  long  run  exceed  the 
imported  quantities  to  an  extraordinary  extent ;  and 
while  the  state  benefits  only  by  the  duties  levied  on  a 
paltry  quantity  of  imported  goods,  the  private  tax- 
gatherer  collects  revenue  from  the  consumer  on  all  the 
home  productions  coming  under  the  same  heading,  at 
least  until  the  home  supply  equals  the  demand. 

To  cover  the  whole  question  by  an  illustration  from 
practical  life,  I  will  mention  the  recent  change  in  price 
produced  by  the  abolition  of  the  duty  upon  raw  wool,  the 
rate  on  the  manufactured  cloth  being  left  as  high  as  be- 
fore, i.  e.,  the  old  ad  valorem  rate  of  50  per  cent.  Only 
the  specific  duty,  which  in  previous  tariffs  compensated 
for  the  duty  upon  the  raw  wool,  was  abolished. 

*  Roscher,  Nat.  Oekonomik  des  Handels  und  Gewerbfeisses,  quoting  Cle- 
ment, Systems  frotecleur. 


CUSTOM'S   TARIFFS  AND  PRICES. 


3<>3 


I  shall  give  the  prices  of  American  cloth  called  sack- 
ings, a  sort  of  so-called  ladies'  cloth,  used  for  ladies' 
dresses.  In  these  the  American  manufacturers  held  the 
field  uninterruptedly  for  a  number  of  years.  Even  under 
the  high  wool  duties  and  the  correspondingly  high  prices 
of  American  wools,  foreign  goods  could  not  be  imported 
by  a  wide  margin  to  sell  against  American  cloths. 

Yet  the  abolition  of  the  duty  on  raw  wool  sent  wool 
prices  down  to  such  an  extent  that,  even  before  the  tariff 
took  effect,  the  cloth  prices  could  be  reduced  as  much  as 
the  difference  between  the  figures  of  the  second  column 
and  those  of  the  first,  which  represents  the  prices  when 
wool  was  still  under  the  full  influence  of  the  wool  tariff. 
The  third  column  presents  the  prices  ruling  in  the  spring 
of  this  year,  after  the  new  tariff  had  been  in  force  for  a 
time  on  woollen  manufactures  likewise.  The  free  wool 
tariff,  be  it  remembered,  became  effective  at  once,  August 
28,  1894;  the  tariff  on  manufactures  of  wool  not  until 
January  I,  1895. 

Here  are  the  effects : 

PRICES   OF   ALL-WOOL   SACKINGS. 


1892, 
October. 
Cents  per 
Yard. 

~i8**' 

October. 
Cents  per 
Yard. 

April. 
Cents  per 
Yard. 

Mailand   35  inches  

12l 

21 

10 

49 

35 

29 

57! 

42} 

36 

62  1 

5° 

39 

Franklin    54  inches  

7O 

55 

44 

Fancy  dress  goods   36  inches  

42l 

3*i 

27 

Broadcloth,  50  inches  

75 

62! 

52} 

Average  for  seven  numbers  

M 

43 

35* 

Decline  of  October,  1894,  price  from  1892 

22  % 

Decline  of  April,    1895,  price  from    1892 

3H* 

AA?£>  PRICES. 

This  class  shows  smaller  differences  than  other  woollens. 
It  had  been  selling  at  considerable  price  reductions  below 
other  manufactures  of  wool  under  the  old  tariff,  for 
reasons  given  and  explained  in  full  in  my  book,  The 
Economy  of  High  Wages. 

This  example  may  therefore  be  considered  as  an  ex- 
ponent of  the  price  situation  created  by  tariff-protection, 
but  modified  by  pressure  of  home-competition  upon  prices, 
and  of  the  net  effect  on  prices  of  so  onerous  a  burden 
upon  industry,  as  a  duty  upon  raw  materials. 

The  United  States  import,  in  moderately  active  years, 
large  quantities  of  woollen  goods.  They  will  amount 
under  the  present  tariff  to  fully  $55,000,000.  The  Ameri- 
can goods  with  which  these  have  to  compete  will  amount 
to  something  like  $250,000,000.  As  these  foreign  goods 
can  be  brought  here  and  pay  a  duty  of  something  like 
50  per  cent.,  it  is  evident  that  the  American  goods  are 
not  sold  at  very  much  lower  prices  than  the  foreign  duty- 
paid  goods.  The  whole  amount,  of  foreign  and  of  domes- 
tic origin,  is  therefore  equally  affected  by  the  change  in 
the  tariff-law. 

I  will  here  add  prices  of  woollen  goods  and  ladies'  dress 
goods  coming  in  actual  competition  with  foreign,  and 
show  the  price  changes  in  these.  They  will  give  a  fair 
idea  of  the  change  in  prices  falling  on  woollen  and  worsted 
fabrics  both  of  domestic  and  foreign  origin. 

The  foreign  prices  quoted  here  are  the  actually  paid 
prices  at  the  shipping  point  for  goods  of  an  identical 
character.  To  make  even  selling  value  with  American 
goods  quoted  in  columns  I  and  2  something  like  lOto  12^ 
per  cent,  will  have  to  be  added  to  cover  carrying  expense 
and  commission  as  these  are  included  in  the  domestic 
prices  but  not  in  the  foreign  prices  : 


TAKIFF-REDUCTION  AND  PRICES. 


305 


PRICES  OF  WORSTED  CLOTH  AND  OF  LADIES*  DRESS 
GOODS  OF  DOMESTIC  PRODUCTION  BUT  SUBJECT  TO 
AN  ACTIVE  FOREIGN  COMPETITION. 


Domestic  prices 
from  the  mill. 

Foreign 
shipping  price 
of  competing 
goods. 

1892. 

I&94-95  • 

Wo 
Quality  XX 

Cashmere  J 

•sted  cloth,  54  inches  wide. 
.X  Clay,  16  ozs  

1-75 
1.65 
1.40 
1.30 

37* 
50 

1.  12?, 
I.OO 

90 

82J 

27t 

32i 

60 
55 
49 
44 

I6J 

19 

"      16  "  

"        14   "    . 

"        12   "    

Ladies'  Dress  Goods. 
,  38  in  

4e  "  .  . 

With  this  allowance  made  the  reader  can  make  his  own 
deductions  as  to  the  effect  of  tariff  taxation  on  the  prices 
of  imported  articles  as  well  as  on  those  of  domestic  manu- 
factures. 

The  consumers  in  the  United  States  are  saved  no  less 
an  amount  than  $170,000,000*  in  their  outlay  for  woollen 

*  I  arrive  at  this  estimate  in  the  following  way : 

Product  of  American  mills  in  1800 $338,000,000 

Allow  for  amount  not  selling  up  to  duty-paid  foreign  prices,  computed  to 
represent -. $50,000,000 

$988,000,000 
$4».000.°«» 


Add  15  per  cent,  to  cover  increase  in  population. 


$330,000,000 

Add  importations  of  wool  and  worsted  manufactures,  1889-90,  $54.000,000 
Duty  at  rate  under  McKinley  Act $53,000,000      $107,000/100 

Net  value  of  foreign  and  domestic  goods $437,000,000 


306  MONEY  AND  PRICES. 

goods  a  year  by  this  very  moderate  measure  of  tariff- 
reform. 

I  have  taken  only  a  few  prominent  examples,  but  they 
will  suffice  to  convince  the  reader  of  the  powerful  distur- 
bance of  prices  by  the  exercise  of  the  taxing  power, 
wisely  or  unwisely  wielded  by  the  state. 

Prices  for  the  last  hundred  years,  especially,  have  been 
subject  to  this  influence,  and  it  is  at  all  times  wise  to  take 
this  point  into  consideration  along  with  all  the  others  here 
treated,  when  we  make  comparisons. 

General  Observations. 

The  numberless  causes  which  operate  on  prices  cannot 
all  be  dealt  with.  I  have  to  content  myself  with  treating 
only  the  leading  ones.  I  have  singled  out  such  as  are 
general  and  have  had  a  very  pronounced  influence  in  the 
past  in  keeping  prices  high,  and  as  by  their  abolition  or 
by  radical  changes  in  them,  prices  have  become  lower  and 
lower  until  they  have  reached  the  phenomenally  low  range 
which  causes  so  much  agitation  at  the  present  time,  the 
fact  completes  the  demonstration  that  prices  are  the  re- 
sults of  inherent  causes  and  not  of  merely  accidental  ones, 

Brought  forward $437,000,000 

Add  discount,  commission,  freight  and  distributing  expense,  and  wholesale 

and  retail  profit  =  60  per  cent $263,000,000 

Amount  of  consumers'  value  of  woollen  goods,  at  full  cost  under  late  tariff  act,  $700,000,000 

Against  this  the  cost  under  the  new  tariff,  as  proved  by  the  price  examples 
given  above,  and  under  the  influence  of  free  wool,  stands  as  follows  : 

Net  value  of  foreign  and  domestic  goods $437,000,000 

Less  difference  caused  by  tariff  reduction,  equal  to  49  per  cent,  of  the  old 
duty  or  24%  per  cent,  of  the  duty-paid  value $106,000,000 

Leaving  net  value  of  domestic  goods  from  mill,  and  of  imported  goods, 

duty  paid,  of $331,000,000 

Add  to  cover  items  as  above,  at  the  same  rate,  60  per  cent $199,000,000 

Amount  of  consumers'  value  of  woollen  goods  under  new  tariff $530,000,000 

Consumers'  value  under  old  tariff $700,000,000 

Balance  saved  to  consumer  through  tariff-reduction $170,000,000 


PERMANENT  CAUSES.  307 

as  the  greater  or  smaller  supply  of  the  money  stocks  would 
be.  It  is  true,  prices  have  become  extraordinarily  low.  But 
as  cheapness  is  the  result  of  plenty  and  of  law  and  order, 
it  is  difficult  to  see  how  the  phenomenon  can  be  changed 
except  by  turning  the  hands  on  the  dial  backward,  drown- 
ing inventors  and  destroying  the  improved  tools,  as  was 
the  practice  in  the  past.* 

It  has  not  been  found  necessary  to  draw  speculative 
causes  into  the  discourse  other  than  by  the  general  refer- 
ence to  them  in  the  preceding  chapters.  In  speaking  of  the 
causes  which  make  prices,  I  had  reference  to  permanent 
price-making  agencies.  Causes  which  come  and  go  with 
the  seasons  or  follow  in  the  wake  of  political  or  even  eco- 
nomic disturbances  have  certainly  a  very  deep  influence, 
and  sufficient  consideration  has  been  given  to  these  ex- 
traordinary causes  in  the  part  devoted  to  the  history  of 
prices.  Their  presence  explains  violent  fluctuations  which 
we  notice  very  frequently,  but  we  cannot  give  them  a  place 
here,  when  causes  are  considered  which  mark  the  prices  of 
great  periods,  when  the  prices  of  the  past  and  the  present 
are  contrasted  under  the  operation  of  economic,  social,  and 
industrial,  conditions  which  have  produced  them. 

The  views  of  those  who  demand  an  artificial  standard 
to  be  substituted  for  the  commercial  standard,  i.e.,  the 
gold-standard  of  civilized  trading  nations,  are  the  outcome 
of  the  idea  that  an  increased  quantity  of  circulation  is  re- 
quired  for  the  maintenance  of  a  certain  level  of  prices. 

*  As  late  as  the  end  of  the  sixteenth  century  the  town-council  of  Danzig 
had  the  inventor  of  a  mechanical  ribbon-loom  drowned  and  his  machine  de- 
stroyed. This  is  perhaps  the  latest  case  of  a  government  applying  in  this 
drastic  manner  the  principle  of  protection.  But  the  "  conseil  dcs  prudhom- 
mes  "  in  Lyons  ordered  Jacquard's  loom  destroyed  and  the  inventor  himself 
narrowly  escaped  assassination  three  times. 


308  MONEY  AND   PRICES, 

The  beneficial  influence  of  the  money  quantities  must 
necessarily  be  supposed  to  be  of  a  general  and  lasting 
effect.  The  controversial  points  seem  therefore  to  be  fully 
covered  by  the  permanent  causes  which  I  have  named  as 
the  true  causes  of  prices. 

It  is  not  specifically  stated  what  range  of  prices  the 
agitators  for  an  artificial  standard  and  of  increased  money 
supplies  would  wish  to  see  prevail.  The  price  level,  un- 
doubtedly, is  to  be  high  enough  to  create  general  content- 
ment among  all  who  have  commodities  to  sell.  That  even 
this  cannot  be  realised,  unless  the  currency  be  depreciated 
in  value  at  the  same  time,  whereby  price-increase  would 
be  nominal  only,  has  been  demonstrated  by  the  price- 
history  of  England,  France,  and  Germany,  for  a  period  of 
six  hundred  years. 

That  wage  earners  and  those  living  on  salaries  and  fixed 
incomes  are  most  acute  sufferers  by  all  such  stratagems, 
has  been  shown  with  a  fulness  of  detail  which  cannot  pos- 
sibly leave  any  doubt  on  the  subject.  That  the  working 
classes,  and  these  are  the  only  ones  which  need  concern 
the  public  conscience,  can  only  look  to  a  reign  of  low 
prices  as  a  guarantee  for  high  earnings  and  general  well- 
being,  is  an  equally  well  established  fact.  Indeed  a  decline 
in  this  condition,  as  has  been  shown  in  preceding  chapters 
and  is  still  more  graphically  proved  in  the  tables  of  the 
appendixes,  dates  directly  from  the  time  when  high  prices 
began  to  change  the  general  level  of  the  three  preceding 
centuries,  at  about  the  middle  of  the  sixteenth  century, 
with  the  evil  of  high  prices  culminating  in  the  seventeenth 
century.  This  is  the  time  when  the  currencies  were  most 
persistently  and  violently  deteriorated. 

It  is  only  within  the  lifetime  of  this  present  generation 
that  prices  of  grain  and  the  rate  of  wages  compare  as 


•  PERNICIOUS  EFFECT  ON   WAGE  EARNER.         309 

favorably  as  they  did  in  the  three  centuries  preceding 
1550  in  the  three  countries  of  Europe  dealt  with  in  these 
pages. 

It  is  the  opinion  of  Thorold  Rogers  that  the  debasement 
of  the  coins  by  Henry  VIII.  and  the  guardians  of  his  son 
caused  the  decline  in  the  condition  of  the  working  classes, 
which  all  the  statutes  of  labor  from  Edward  III.  onwards 
were  not  able  to  effect.  All  the  price  facts  adduced  here 
prove  completely  the  correctness  of  this  view. 


APPENDIX  A. 


A  Summary  of  the  Price  History  of  England,  France,  and  Germany,  giving 
in  Parallel  Columns  Grain-Prices  and  Wages,  with  their  Purchasing 
Power  in  Bushels  of  Grain,  from  A.D.  1351  to  1882. 

FOR  the  purpose  of  illustrating  in  a  graphic  manner  the 
price  history  treated  in  the  preceding  pages,  I  annex  tables  of 
comparative  prices  of  wheat  and  of  barley  of  the  three  coun- 
tries in  parallel  columns,  reducing  them  at  the  same  time  to 

I.— PRICES  OF  WHEAT  AND  BARLEY  RULING  IN  ENGLAND,  FRANCE, 
AND  GERMANY  IN  THE  PERIODS  NAMED  BELOW,  IN  THE  MEAS- 
URES AND  PRESENT  MONEYS  OF  THE  RESPECTIVE  COUNTRIES, 
AND  IN  EQUIVALENTS  OF  THE  UNITED  STATES. 


ENGLAND. 

FRANCE. 

GERMANY. 

j 

JU 

j 

X 

• 

s 

!T 

J 

2 

£ 

i 

x 

i 

| 

f 

I* 

I 

J 

J 

1 

M 

jj 

M 

"5 

M 

Periods. 

^ 

^ 

« 

^ 

^ 

« 

* 

w 

n 

6. 

U 

•s 

T? 

i 

| 

^ 

•i 

. 

. 

^ 

i 

jj 

j; 

1 

— 

M 
3 

| 

a 

1 

| 

•3 

•» 

1 

O1 

0- 

« 

a 

» 

n 

S 

s 

» 

A 

t.     d. 

.».   d. 

$  ct,. 

Jrf*. 

/V<j*« 

Franc, 

t  ct,. 

/«•/•. 

Mrkt. 

Mrkt. 

$  ct*. 

*  f  /*. 

1351-1450 

18.0 

II.  6 

0.58 

0.35 

6.89 

2.81 

0.48 

0.20 

9.20 

5-75 

0.47 

0.29 

1451-1550 

18.4 

11.9 

0.59 

0.36 

4.56 

2.48 

0.31 

"  17 

II.  OO 

6-35 

0.56 

0.32 

1551-1580 

150 

9.11 

0.44 

0.30 

12.  OO 

6.00 

0.78 

0-39 

21  25 

14.05 

-05 

O.70 

1591-1612 

35-0 

195 

.06 

0.59 

17.00 

6.60 

I.  II 

0-43 

3275 

18  20 

.64 

O.92 

1613-1652 

42.8 

23-4 

.28 

0.71 

18.70 

8.20 

1.  21 

0-54 

35-OO 

21.25 

.86 

1.08 

1653-1702 

40.5 

21.5 

.21 

0.62 

1475 

6.12 

0.96 

0.4  1 

3O.OO 

19-70 

.50 

1.  00 

1715-1765 

35-0 

.06 

10.80 

5-25 

O.7O 

0.38 

22.50 

15-75 

.12 

0.79 

1766-1800 

54-0 

-64 

15  oo 

8.20 

0-97 

0.51 

1  8.  20 

9.82 

0.91 

049 

1801-1830 

86.0 

2.6l 

19.80 

1.28 

*i7-oo 

10.40 

0.85 

0.53 

1882  

44-0 

32.0 

1.32 

0.97 

21.00 

1-43 

*3O.oo 

18.00 

1.48 

0.88 

*  German  prices  from  1800  on  are  based  on  the  thaler  standard. 
311 


312 


APPENDIX  A. 


American  money  and  measure.  I  also  give  the  current  rates 
of  wages  of  occupations  on  which  continuous  information  can 
be  gathered.  I  bring  the  comparison  up  to  the  time  at  which 
the  English  Corn  Laws  ceased  to  exert  an  influence  on  prices. 
The  price  quotations  from  1882,  with  the  ruling  wage  rate  ap- 
pended, give  us  an  opportunity  for  measuring  the  price  and 
wage  history  of  the  past  by  present  rates  and  prices,  with 
which  every  one  is  conversant. 

In  regard  to  the  selection  of  occupations,  it  will  be  under- 
stood that  the  choice  is  ready  at  hand.  The  building  trades 
are  fully  developed  at  a  time  when  other  crafts  are  still  con- 
ducted in  a  manner  in  which  they  are  incapable  of  treatment 
in  a  historical  examination  of  wages. 

In  the  next  table  I  give  the  rates  of  wages  paid  during  the 
same  average  periods  in  England,  France,  and  Germany. 
When  the  two  are  combined,  the  prices  of  grain  and  the  rates 
of  wages,  their  real  import  becomes  apparent. 

II.— RATE  OF  DAY-WAGES  OF  CARPENTER  AND  MASON 
RULING  IN  ENGLAND,  FRANCE,  AND  GERMANY  IN  THE 
PERIODS  NAMED,  IN  THE  MONEY  OF  THE  COUNTRIES 
AND  OF  THE  UNITED  STATES. 


ENGLAND. 

FRANCE. 

GERMANY. 

Periods. 

| 

§ 

V 

0 

c 

• 

| 

c 

c 

V 

c 

e 

C 

V 

c 

d 

| 

c 

O 

V 

& 

• 

• 
a 
2 

1 

• 

S 

1 

1 

rt 
S 

1 
it 

1 

V 

& 

• 

3 

V 

fr 

3 

s 
% 

CJ 

O 

O 

U 

U 

O 

d. 

d. 

Cents 

Cents 

Francs 

Francs 

Cents 

Cents 

Afrits. 

Mrks. 

Cents 

Cents 

I35I-I450. 

Hi 

i6f 

35 

34 

I.O4 

1.07 

2O 

21 

1-75 

1.85 

41 

44 

1451-1550. 

20| 

18 

41 

36 

O.Q7 

0.87 

19 

18 

1.40 

I.  6O         32 

39 

1551-1580. 

12 

!0i- 

24 

21 

1.  01 

0.96 

2O 

19 

2. 

2. 

47 

48 

1591-1612. 

13* 

14 

27 

28 

I.I9 

I.  2O 

23 

23 

2.6O 

2.65 

62 

63 

1613-1652.  |i6£ 

19 

33 

3* 

1-25 

O.9O 

24 

18 

2.80 

2.85 

68 

69 

1653-1702. 

24| 

27 

5« 

54 

I.IO 

I.IO 

21 

21 

2.4O 

2.52 

58 

60 

1715-1765. 

30 

31 

60 

62 

0.96 

0.98 

19 

19 

1.70 

1.90 

40 

45 

1766-1800. 

30     133 

66 

66 

1.  20 

I.J5 

21 

22 

i-35 

1.70 

30 

•  40 

1801-1830. 

63 

63 

126 

126 

1882 

66 

66 

132 

132 

2.50 

3.OO 

60 

71 

APPENDIX  A. 


313 


The  equivalent  in  wheat  of  a  day's  wages  of  a  carpenter  and 
a  mason  is  shown  in  Table  III.,  and  the  equivalent  of  barley  in 
Table  IV.,  for  each  of  the  three  countries,  in  parallel  columns. 

The  showing  proves  the  positions  which  I  have  taken  in  the 
preceding  chapters.  A  few  words  of  explanation  will  not  be 
out  of  place  to  make  the  meaning  clear.  It  will  be  noticed 
that  the  range  of  prices  and  the  rates  of  wages  of  the  three 
countries  vary  materially  held  against  one  another.  As  re- 
gards wages,  the  lowest  rates  are  those  for  France.  For  the 
whole  time  dating  from  the  middle  of  the  sixteenth  century, 
the  purchasing  power  is  barely  one-half  of  what  it  was  in  the 
century  following  the  conclusion  of  the  English  wars.  The 

III.— PURCHASING  POWER  OF  A  DAY'S  WAGES  EXPRESSED  IN 
BUSHELS  OF  WHEAT  FROM  1351  TO  1882. 


ENGLAND. 

FRANCE. 

GERMANY. 

Periods. 

fa 
H 
*« 

f  Carpenter 
Mason. 

jivalent 
Wheat. 

of  Wheat 
Bushel. 

>f  Carpenter 
Mason. 

uivalent 
Wheat. 

of  Wheat 
Bushel. 

II 

*•» 

•~  a 

uivalent 
Wheat. 

8| 

w.S 

•C  o. 

|| 

S* 

S  V 

•c  5. 

H 

W- 

PH 

a 

Pu 

1 

PH 

»C*. 

•  Cb. 

Bushels 

$«.. 

•  c». 

Busktls 

$a,. 

•  a,. 

Buikth 

1351-1450 
I45I-I550 
I55I-I580 
1591-1612 
1613-1652 
1653-1702 

0.58 
0.59 
0.44 
1.  06 
1.28 
1.  21 

0.35 
0.39 
0.23 
0.28 

0.35 
0.52 

0.66 
0.66 
0.52 
0.27 
0.28 
0.43 

0.48 
O.3I 
0.78 
I.  II 
1.  21 
0.96 

0.20 
0.19 
O.I9 
0.23 
O.2I 
O.2I 

0.42 
o.or 
0.25 

0.21 
O.2O 
0.22 

0.47 
0.56 
1.04 
1.64 
1.85 
1.50 

0.42 

0.35 
0.48 
0.62 
0.69 
0.58 

0.90 
O.62 
0.46 
0.38 
0.36 
0.39 

1715-1765 

1.06 

0.61 

0-57 

O.70 

O.I9 

0.27 

1.  12 

0.43 

O.4O 

1766-1800 

1.64 

0.63 

0.38 

0.97 

O.2I 

0.22 

O.gl 

0.31 

0.34 

1800-1830 
1882 

2.61 

1.32 

1.26 
1-35 

0.48 
1.05 

1.28 

1-43 

0.48 
0.78* 

0-33 

0.55 

0.85 

0.65 

0.44 

*  I  have  taken  the  average  of  wages  for  the  principal  town*  of  the  Departmenti  as  being  on 
a  fairer  basis  for  comparison,  with  German  wages  quoted,  at  least.  The  average  for  ParU  is 
about  7.50  fcs. ;  for  the  Departments  about  4  fcs.  a  day. 

t  The  original  price*  from  1800  on  are  given  in  the  thaler  standard. 


314 


APPENDIX  A. 


average  wage  rate  changes  but  little  from  1351  down  to  the 
end  of  the  eighteenth  century,  rising  very  slightly  only  in  the 
dear  years.  The  difference  in  wheat  prices  from  the  lowest 
range,  in  the  period  1451  to  1550,  to  the  highest,  in  1613  to 
1652,  is,  however,  as  i  to  nearly  4.  In  consequence,  a  day's 
wages  in  1451  to  1550  bought  0.61  bushel  of  wheat  or  1.12 
bushels  of  barley  ;  in  1613  to  1652  the  day  wage  procured 
only  0.20  bushel  of  wheat  or  0.39  bushel  of  barley  for  a  ma- 
son or  a  carpenter. 

It  might  appear  singular  that  wages  in  France  respond  so 
little  to  the  rise  in  grain  prices.  We  note  in  the  tables  for 
Germany  that  wages  are  more  responsive  to  the  rise,  though 


IV.— PURCHASING   POWER  OF  A  DAY'S  WAGES  EXPRESSED  IN 
BUSHELS  OF  BARLEY  FROM  1351  TO  1882. 


ENGLAND. 

FRANCE. 

GERMANY. 

"c  o 

^0 

«8 

k| 

2  8 

>> 

£  S 

X 

S   rt 

Periods. 

u    4) 
0 

|s 

I* 

JJ  — 
«1 

a& 

c  >, 

2^ 

l^ 

g;T 

offl 

"o  " 

J1 

o 

°u 

5  S 

*°  * 

>  S 

Is. 

&* 

o1 

V     ki 

&S 

•=» 

o* 

S  t 

EC 

F 

I 

<I 

H 

£ 

|| 

H 

£ 

I 

"S1 

|C». 

$c*. 

Bushels 

ICto. 

$0*. 

Bushels 

$a, 

$  C/J. 

Bushels 

I35I-I450. 

0.35 

0.35 

I. 

0.20 

O.2O 

I. 

0.29 

0.42 

1-45 

1451-1550. 

0.36 

0-39 

1.  08 

O.I? 

O.ig 

1.  12 

0.32 

0-35 

1.  1O 

1551-1580. 

0.30 

0.23 

0.77 

o  39 

o.  19 

0.50 

0.70 

0.48 

0.70 

1591-1612. 

0.59 

0.28 

0-47 

o.43 

0.23 

o  53 

0.92 

0.62 

0.67 

1613-1652. 

0.71 

0-35 

0.50 

0.52 

O  21 

0.40 

i.  08 

0.6g 

0.65 

1653-1702. 

0.62 

0.52 

0.84 

041 

0.21 

0.51 

I.OO 

0.58 

0.58 

171  "  —  I  76^ 

0.38 

O.  IQ 

0.50 

0.79 

0-43 

0.55 

1766—1800. 

0.51 

7 

O.2I 

0.41 

0.49 

0.31 

o  63 

1800—1830. 

0.52* 

1882 

0.88* 

0.65 

0.74 

*  Prices  from  1800  on,  in  the  original  quotations,  are  based  on  the  thaler  standard. 


APPENDIX  A.  315 

they  express  but  to  a  very  small  extent  the  altered  price  con- 
ditions. 

Xanten,  from  which  place  the  prices  are  quoted,  as  already 
pointed  out,  is  in  immediate  touch  with  regions  where  all  the 
industrial,  commercial,  and  civilizing  agencies  were  most 
actively  engaged  to  procure  a  higher  state  of  well  being  during 
times  in  which  France  was  subjected  to  the  bad  conditions 
described,  and  in  a  state  of  backwardness  in  industrial  devel- 
opment barely  credible  from  the  point  of  progress  it  holds 
to-day. 

The  prices  and  wage  rates  at  Xanten  must,  therefore,  be 
taken  with  the  allowance  that  they  are  specific,  and  those  for 
France,  as  general  average  prices. 

The  retrogression  for  the  Germany  of  the  lower  Rhine  re- 
gion from  the  second  half  of  the  sixteenth  century  is,  how- 
ever, not  the  less  pointed. 

The  conditions  from  the  middle  of  the  thirteenth  to  the  end 
of  the  fifteenth  century  were  the  most  favorable  in  Germany's 
position,  as  pointed  out  heretofore.  It  finds  expression  in  the 
above  price  comparisons. 

At  a  time  when  England  is  only  agricultural  in  its  eco- 
nomic development,  the  middle  of  the  fourteenth  century, 
magistrates  of  German  towns  begin  to  issue  ordinances  limit- 
ing the  expenditures  in  dress,  to  reduce  the  cost  of  what  they 
deemed  luxurious  living. 

The  town  council  of  Strassburg  in  1370  orders  that  no 
woman  is  to  spend  more  than  30  goldflorins  for  a  single  dress. 
The  goldflorin  containing  then  3.55  grams  of  gold  (66  to  the 
mark  fine  of  Cologne),  was  worth  $2.35  in  present  value.  The 
value  of  a  dress  at  $70  was,  therefore,  frequently  exceeded  by 
the  burgher's  wife,  else  an  ordinance  naming  30  goldflorins 
as  the  maximum  would  not  have  been  found  necessary. 
Schmoller  says  :  "  The  beautiful  costumes  of  the  thirteenth 
century  give  way  to  all  possible  excrescences  of  fashion.  The 
well-to-do  classes  indulged  in  the  most  fanciful  and  luxurious 


316  APPENDIX   A. 

changes  of  color  and  style,  until  the  Reformation  diffused,  also 
in  this  direction,  a  more  severe  and  measured  taste."  * 

The  effect  on  the  trades  of  the  towns  could,  however,  not 
have  been  otherwise  but  beneficial.  The  trade  of  the  weavers, 
and  of  all  those  connected  with  the  industry,  was  necessarily 
enhanced  by  it,  and  the  progress  made  through  the  influence 
of  an  extensive  home  demand  for  finer  fabrics  than  the  cloth 
supplied  by  the  wife  or  the  female  slave  in  the  eleventh  and 
twelfth  centuries  could  not  fail  to  arouse  a  demand  from 
abroad.  Schmoller  but  expresses  the  causes  leading  to  the 
activity  in  trade  and  the  advantageous  position  of  the  work- 
ing classes  when  he  says  that  "  this  increased  demand  formed 
the  common  basis  for  the  development  of  the  German  textile 
industry,  which  had  begun  in  the  thirteenth,  and  made  its 
progress  in  the  fourteenth  and  fifteenth,  centuries.  The  home- 
loom  in  country  and  town  could  no  longer  furnish  the  desired 
materials  in  quantity,  and  far  less  in  color  and  in  quality." 
That  all  other  trades  were  equally  stimulated  and  advantage- 
ously affected  is  self-evident. 

In  a  general  way,  much  as  the  grain  prices  vary  between 
one  country  and  another,  the  purchasing  power  of  a  day's 
wage  is  the  same  in  the  time  where  equally  favorable  political 
conditions  exist.  This  is  the  century  closing  with  1550.  Gen- 
erally speaking,  it  is  a  century  of  peace,  devoted  to  the  culti- 
vation of  the  higher  aims  of  life,  the  period  of  the  Renais- 
sance. 

During  that  hundred  years  a  day's  wages  buys  more  wheat 
and  barley  in  France  than  at  any  time  before  or  after,  con- 
sidered in  same  general  average  periods. 

From  thence  on,  the  furies  let  loose  by  fanaticism  hold  their 
destroying  carnival.  The  decline  of  the  fervor  finds  other 
hallucinations,  as  the  favorable  balance  of  trade  theory,  ready 
incentives  for  governments  to  fall  upon  neighboring  states  and 
lay  them  waste,  so  that  they  themselves  may  prosper  the  more. 

*  Gustav  Schmoller,  Die  Strassburgcr  Tuc her-  und  Weber-Zunft,  page  57. 


APPENDIX  A.  317 

The  effect  is  made  evident  in  the  above  comparisons,  where 
the  periods  are  classed  more  in  relation  to  the  historical 
events  than  with  regard  to  regular  chronological  dividing 
lines. 

The  period  1451  to  1550  shows  an  equally  high  rate  of  pros- 
perity of  the  working  classes  in  the  three  countries,  measured 
by  the  purchasing  power  of  their  wages.  In  all  of  them  the 
decline  in  the  seventeenth  century  is  marked,  but  to  a  less 
degree  in  the  German  quotations  than  in  those  of  England 
and  France.  The  reason  is,  as  stated,  in  the  more  fortunate 
position  of  the  lower  Rhine  country  in  all  these  periods. 
This  condition  was,  however,  not  enjoyed  by  the  rest  of  Ger- 
many. The  decline  of  Xanten  gives  an  idea  what  it  must 
have  been  elsewhere.  That  it  was  of  the  serious  nature  de- 
scribed in  the  preceding  part  is  made  manifest  enough  by 
numerous  recitals  from  the  records.  The  laments  over  high 
prices,  famines,  and  complaints  of  the  workingmen  that  they 
cannot  exist  at  the  old  rates  are  of  constant  recurrence  in  the 
second  half  of  the  sixteenth  century.  The  conditions  become 
more  and  more  aggravated  with  its  closing  decades. 

As  an  instance  of  the  frequent  cases  of  dearth  and  famines 
cited,  a  case  is  given  of  a  woman  who  begs  intently  for  a 
scheffel  of  rye,  Tor  which  she  offers  all  her  ready  money,  2 
thalers  and  13  al.bi  (52  albi  to  the  thaler).  The  scheffel  is  the' 
fourth  part  of  a  malter  ;  the  maker  at  4$  bushels  gives  the 
scheffel  at  about  \\  bushels.  The  thaler  was  then  at  the  ratio 
of  8  to  the  mark  fine,  hence  of  a  value  of  $1.20.  The  scheffel 
price  was,  therefore,  2^X  i.2o=$2.7o,  which  is  equal  to  $2.25 
the  bushel. 

The  sad  part  of  the  story  is,  however,  that  the  woman  could 
not  get  the  rye  she  so  anxiously  asked  for. 

The  relations  of  the  moneys,  as  said  before,  are  not  as  ac- 
curately stated  as  would  have  been  the  case  had  the  author 
from  whose  tables  I  took  my  data  striven  only  to  give  the 
prices  in  the  money  equivalents  of  the  present  time,  instead  of 


3l8  APPENDIX  A. 

giving  a  bewildering  account  of  all  sorts  of  moneys,  few  of 
which  have  a  bearing  on  the  prices  and  on  the  subject. 

The  only  safe  guide  is  the  statement  giving  the  relations  of 
the  mark  of  the  chapter  in  which  the  prices  and  wages  are 
quoted  to  the  Reichsmark  of  to-day.  Up  to  1550  the  altera- 
tions are  not  very  violent.  From  that  time  to  the  early  part 
of  this  century  the  decline  is  from  a  value  of  about  5.50  rmks. 
to  the  low  value  of  \  rmk. 

The  decline  from  5^  to  4^,  from  4^-  to  3,  from  there  to 
2^,  2,  i-j,  f,  to  finally  ^,  is  stated  at  certain  years.  But  we 
are  left  in  doubt  when  the  change  has  taken  place  as  bearing 
on  prices.  It  is  well  known  that  the  changes  were  gradual, 
and  by  no  means  came  with  sufficient  regularity  to  enable  one 
to  decide  when  they  had  become  definitely  settled.  I  have 
thought  it  safer,  therefore,  to  accept  the  extreme  and  perma- 
nent changes  noted  in  the  price  columns  as  indicating  the 
time  when  the  lowering  of  the  standard  had  become  a  settled 
fact.  With  this  guidance,  I  took  an  average  between  the  two 
extremes  as  expressing  nearest  the  actual  value  of  the  moneys 
of  the  period  which  were  left  somewhat  in  doubt  from  about 
1580.  The  difference,  however,  is  not  great.  Besides,  the 
benefit  of  the  doubt  is  given  to  the  lower  range  of  price 
equivalent,  dating  from  the  time  of  the  continuous  debasing 
of  the  coins,  than  would  follow  from  a  strict  adherence  to 
set  dates  for  this  computation. 

From  the  middle  of  the  eighteenth  century  to  the  year  1830 
prices  of  corn  were  lower  in  Germany  than  either  in  France 
or  England.  This  was  especially  the  case  in  the  first  half  of 
this  century.  Wages,  however,  had  kept  more  than  even 
pace  with  this  decline.  I  have  no  data  of  wages  for  Xanten. 
The  statement  given  elsewhere  of  the  wages  paid  by  Alfred 
Krupp  at  Essen  in  the  year  1827  shows  a  rate  of  not  over  one- 
half  that  paid  in  1451  tP  1550  at  Xanten,  which  place  is  not 
many  miles  distant  from  Essen.  But  low  as  the  corn  prices 
were  in  the  early  part  pf  {he  nineteenth  century  in  Xanten, 


APPENDIX  A.  319 

they  were  still  50  per  cent,  above  the  average  of  the  Quinto 
Cento  period.  While  a  day-wage  of  a  carpenter  or  mason 
bought  0.62  bushel  of  wheat  then,  in. the  nineteenth  century 
it  bought  but  0.21  bushel,  or  about  as  much  as  in  France  in 
the  worst  of  times  of  war  and  frequency  of  famine.* 

This,  however,  is  by  no  means  the  lowest  rate  of  earnings 
in  those  deplorable  years.  In  Saxony  and  other  parts  of  Ger- 
many a  day's  wages,  even  in  cheap  years,  of  the  latter  part  of 
the  eighteenth  and  the  first  part  of  this  century  is  quoted  as 
equal  to  0.05  hectolitre  or  0.14  bushel  of  rye.  But  rye  holds 
a  nearer  relation  to  barley  in  price  than  to  wheat. 

It  must  not  be  forgotten  that  wheat  played  a  smaller  part  in 
the  domestic  economy  of  the  working  classes  of  the  past  of 

*On  page  239  I  speak  of  the  rate  of  wages  per  day  paid  to  iron-workers  at 
the  works  of  Krupp,  at  Essen,  in  the  year  1827,  as  l6j^  cents  for  casters  and 
smiths,  according  U>  Mr.  Alfred  Krupp's  own  statement.  The  average  price 
of  wheat  was  83  cents,  of  rye  53,  and  of  barley  44  cents.  If  a  workman 
had  laid  out  his  wages  in  grain  he  would  have  obtained  either  0.20  bushel 
of  wheat,  0.31  bushel  of  rye,  or  0.37  bushel  of  barley. 

In  1887  I  visited  Essen,  and  obtained,  among  other  very  valuable  informa- 
tion, a  statement  from  the  managing  director  of  the  works  as  to  the  wages  of 
the  men. 

The  average  of  all  employed  is  3  marks  (72  cents),  and  exclusive  of  boys, 
invalids,  and  pensioners  under  the  old  age  insurance  act,  the  average  is  3.40 
marks. 

This  average  divides  as  follows  : 

Common  laborers  and  firemen,  2.40  marks  (58  cents) ;  while  about  40  per 
cent,  of  the  men  earn  4  marks  (95  cents).  These  represent  the  smiths,  the 
class  spoken  of  in  the  statement  for  1827.  I  must  say,  however,  that  the  lad 
who  showed  me  through  the  works  told  me  that  his  father,  being  paralytic 
and  drawing  40  marks  monthly  pay  from  the  pension  fund,  when  able  to 
work  at  his  trade  of  a  puddler,  earned  35  marks  as  two  weeks'  pay.  This 
does  not  show  more  than  an  average  of  3  marks,  or  72  cents,  a  day.  This  is 
not  introduced  here  as  opposed  to  the  statement  of  the  firm,  but  to  slmw 
that  even  among  so  important  a  class  as  puddlers  in  the  iron  industry  there 
were  men  who  did  not  earn  more  than  3  marks.  I  am  certainly  justified  t" 
draw  an  average  between  the  two  statements  for  establishing  the  rate  of  pay 
in  1887  of  the  occupations  referred  to  by  Mr.  Krupp  in  his  address  to  his 


320  APPENDIX  A. 

England  and  France  at  least,  than  at  the  present  time. 
Barley,  was  of  great  importance  in  the  workingman's  beer  in 
England  and  Germany,  and  so  was  rye  as  a  bread  corn.  Rye 
taken  at  about  one-fifth  above  barley  prices  will  give  a  fair 
expression  of  the  general  run  of  prices  of  this  cereal  for  com- 
parison. 

With  this  allowance  made,  a  comparison  with  the  figures  of 
Table  IV.  gives  an  adequate  idea  of  the  misery  to  which  the 
German  working-classes  had  become  reduced  by  the  early 
part  of  this  century,  when  0.14  bushel  of  rye,  equal,  in  barley 
price  of  the  same  time  to  about  0.19  bushel,  expressed  the 
earnings  of  an  able-bodied  workingman  in  the  industrial 
centres  even. 

workingmen.  A  rate  of  3)^  marks  (84  cents)  would  therefore  mark  the 
present  (1887)  wage  rate,  against  16^  cents  of  1827,  in  the  same  works,  for 
the  same  occupations. 

Expressed  in  bushels  of  grain  these  wages  bought,  according  to  the  follow- 
ing prices  ruling  in  the  neighborhood — wheat  $1.17,  rye  $0.78,  barley  $0.70 
the  bushel — 0.72  bushel  of  wheat,  1.08  bushels  of  rye,  or  1.20  bushels  of 
barley. 

The  relations  of  wages  of  1887  to  1827  stand  as  something  over  5  to  I  ex- 
pressed in  money,  and  as  something  over  3^2  to  I  expressed  in  grain. 

This  shows  the  progress  made  in  the  condition  of  the  working  classes 
solely  by  the  improvements  in  the  economy  of  production  of  which  the  last 
fifty  years  have  been  so  prolific.  The  greater  productiveness  of  labor  re- 
sulting therefrom  enabled  the  paying  of  these  higher  wage  rates.  The 
cost  of  production  has  become  reduced  at  the  same  time  to  an  almost  fabu- 
lous degree  in  the  very  industry  where  this  wage  development  has  taken 
place.  With  this  phase  of  the  argument  the  reader  has  been  made  familiar 
in  the  pages  treating  this  subject. 

I  will  add  that  if  we  take  sections,  as  in  the  mountain  districts  of  Germany, 
where  the  old  methods  are  still  in  practice,  the  earnings  to-day  are  not  higher 
than  they  were  at  Essen  some  seventy  years  ago.  For  this  statement  I  have 
also  recent  positive  proof  in  hand. 

Turn  it  as  we  may,  we  always  come  back  to  the  same  proposition  :  The 
only  divisible  quantity  is  the  product  of  labor. 

The  greater  the  productiveness  of  labor  the  higher  the  rate  of  wages  and 
the  profit  share  of  all  engaged  in  the  creation  and  distribution  of  products. 


APPENDIX  A.  321 

The  effect  of  the  Corn-Laws  in  English  prices  is  made 
plain  by  the  comparisons  here  afforded  with  contemporane- 
ous German  prices. 

By  the  act  of  1804  the  duties  on  foreign  wheat  were,  when 
under  63*.  the  quarter,  £\  4*.  $d. ;  at  or  above  63,1.,  but  under 
66s.,  £o  2s.6d. ;  at  or  above  66s.t  £o  os.  6d. 

By  the  act  of  1815  the  importation  of  corn  was  prohibited 
when  under  8os.  the  quarter  or  los.  the  bushel.  Care  was 
therefore  taken  that  it  should  not  go  below  8s.  the  bushel;  and 
as  this  was  not  deemed  sufficiently  remunerative  a  price,  the 
later  twist  was  applied  to  bring  it  up  to  los.  ($1.94  and  $2.43 
the  bushel). 

The  last  price  quotation  in  the  tables  shows  reversed  posi- 
tions. The  price  of  grain  in  England  is  the  free-trade  price, 
and  is  about  as  much  below  the  Continental  prices  as  the  rate 
of  duty  amounts  to  which  the  paternal  governments  of  the 
Continent  were  pleased  to  put  upon  the  bread  of  the  people  in 
their  solicitude  for  the  welfare  of  the  landed  proprietors. 

The  great  price  differences  existing  between  one  country  and 
another  can  permit  of  no  other  interpretation  than  that  they 
were  the  result  of  inherent  causes  which  bore  a  direct 
influence  on  them.*  Their  nature  has  been  sufficiently 
explained  to  need  special  reference  here. 

That  the  increased  money  supply  had  nothing  to  do  with 

*  This  is  illustrated  with  particular  clearness  by  the  prices  of  grain  of  the 
second  half  of  the  sixteenth  century.  The  prices  for  the  century  1450  to 
1550  are  on  the  general  level  of  the  preceding  century.  English  and  German 
prices  vary  but  a  few  points  from  one  another.  French  prices,  generally 
lower  in  the  early  period,  but  on  a  comparatively  higher  basis  during  the 
period  known  as  the  time  of  the  Hundred  Year  War,  have  gone  back  again 
to  the  low  rates  ruling  before  the  English  invasion  under  Edward  III.  But 
in  the  second  half  of  the  sixteenth  century  French  and  German  prices  rise 
to  abnormal  heights,  while  English  prices  are  lower  up  to  1580  than  in  1450 
to  1550.  England  enjoyed  a  period  of  peace  and  settled  conditions  under 
Elizabeth,  while  Germany  and  France  were  torn  by  civil  and  religious  wan, 
with  dearth  and  famine  in  their  train. 


322  APPENDIX  A. 

the  price  changes  could  not  be  demonstrated  more  plainly 
than  from  the  comparison  of  German  grain  prices  of  the  latter 
part  of  the  eighteenth  and  the  first  part  of  the  nineteenth  cen- 
tury with  the  prices  of  the  sixteenth  and  seventeenth  centuries. 
They  have  gone  back  to  positions  not  very  far  removed  from 
the  prices  previous  to  the  time  from  where  the  great  rise  be- 
gan in  the  second  half  of  the  sixteenth  century. 

I  have  examined  corroborative  tables  of  grain  prices  in  Mr. 
Bein's  publication,  referred  to  heretofore.*  I  find  here  for' 
Saxony  very  high  prices  in  the  seventeenth  century,  low  prices 
in  the  middle  of  the  eighteenth  century,  and  for  a  number  of 
years,  from  1763  to  1772,  prices  three  to  four  times  as  high. 
From  then  on  to  about  1830,  with  the  exception  of  a  number 
of  dear  years  between  the  year  1800  and  1816,  the  general 
price  average  is  about  z\  thalers  for  barley,  3  thalers  for  rye, 
and  4  thalers  for  wheat  the  Dresden  sell  erf  el.  This  scheffel, 
equal  to  104  liters,  measures  something  like  3  bushels  English. 
Reckoning  the  thaler  at  75  cents,  as  it  was  of  a  somewhat 
higher  value  in  the  last  century  (13^  thalers  to  the  mark)  than 
in  its  later  conversion  in  the  i4-thaler  ratio  per  mark  fine,  we 
get  $1.69,  $2.25,  and  $3.00  as  the  price  for  the  scheffel  of 
barley,  rye,  and  wheat ;  or,  reduced  to  bushels,  56  cents  for 
barley,  75  cents  for  rye,  and  $1.00  for  wheat. 

Grain  prices  for  Plauen  and  the  Voigtland  are  generally  higher 
than  in  other  parts  of  Saxony  or  Germany,  as  stated  by  Mr.  Bein, 
on  account  of  the  less  favorable  conditions  of  soil  and  climate 
in  relation  to  agriculture,  and  the  relatively  greater  density  of 
population. 

This  corroborates,  therefore,  the  statements  in  the  preceding 
tables,  and  proves  again,  if  any  further  proof  were  needed, 
that  the  high  prices  of  grain,  beginning  in  the  second  half  of 
the  sixteenth  century,  were  entirely  due  to  other  causes  than 
the  increasing  money  supply.  But  whatever  part  of  these 

*  L.  Bein,  Die  Industrie  des  Saechsischen  Voigtlandes. 


APPENDIX  A.  323 

causes  is  traceable  to  the  debasing  of  the  coins,  which  raised 
prices  nominally,  or  to  the  influences  depressing  agriculture,  so 
powerful  during  the  latter  half  of  the  sixteenth  and  the  entire 
length  of  the  seventeenth  century,  the  fact  stands  out  in  bold 
relief,  from  the  price  history  of  the  three  countries,  that  the 
effect  on  the  fate  of  the  working-classes  was  disastrous. 


APPENDIX   B. 

INFLUENCES   BEARING  ON  PRODUCTION. 

INTRODUCTORY   LETTER   TO   THE  AUTHOR'S   REPORT   ON   TECHNICAL 
EDUCATION. 

January  II,  1888. 
Hon.  T.  F.  BAYARD, 

Secretary  of  State,  Washington,  D,  C. 

SIR  : 

Pursuant  to  my  instructions  I  proceeded  to  examine  by  per- 
sonal observation  into  the  condition  and  prospects  of  Tech- 
nical Education  in  the  principal  industrial  countries  of 
Europe.  It  was  evident,  and  my  instructions  point  this 
out,  that  an  inquiry  of  this  nature  could  not  confine  itself 
to  the  pedagogical  side  of  it,  but  would  have  to  extend  over 
all  the  phenomena  of  industrial  life.  A  study  of  the  economy 
of  production  in  the  different  countries  which  are  to-day  com- 
peting for  the  prize  in  the  world's  markets  seems  to  be  the 
broader  ground  upon  which  an  inquiry,  as  demanded,  was  to 
be  founded.  Technical  Education  not  alone  as  given  by  the 
school,  but  by  school  and  life,  tradition,  theory,  and  action. 
The  school  and  the  workshop,  the  college  and  the  factory,  the 
art  school,  the  museum  and  industrial  art  works,  as  well  as  the 
practices  of  the  people,  would,  under  this  view,  become  neces- 
sary subjects  of  inquiry.  That  this  would  have  to  be  the  line 
upon  which  to  proceed  became  evident  after  even  a  superficial 
examination  of,  and  acquaintance  with,  the  methods  of  the  peo- 
ple. The  closer  we  get  to  them  the  more  we  realize  how  great 
the  influence  which  habits,  association,  and  inherited  views 
exercise  upon  the  formation  of  national  character. 

324 


INFLUENCES  BEARING  ON  PRODUCTION.  325 

The  methods  employed  in  production  are  largely  governed 
by  these  causal  influences.  They  impress  their  stamp  upon 
the  output  even,  on  the  work  measured  quantitatively  and 
qualitatively.  Of  this  phase,  the  elementary  one,  a  visiting  of 
schools  hardly  gives  an  adequate  idea.  It  becomes  clear  to 
us,  when  we  observe  the  people  engaged  in  their  daily  occupa- 
tions, that  the  busy  marts  of  life,  the  shop  and  the  factory 
have  to  supply  the  requisite  measure  for  an  understanding  of 
the  relative  positions  nations  occupy  in  the  industrial  progres- 
sion of  their  time.  The  aim  and  end  of  all  industrial  activ- 
ity are  the  supplying  of  food,  clothing,  shelter,  and  necessaries 
of  life  to  the  worker  and  his  dependents.  What  we  call  luxu- 
ries are  only  the  necessaries  of  a  more  advanced  state  of 
civilization.  A  people's  state  of  civilization  can  therefore  be 
measured  best  by  what  its  working  classes  consider  necessaries 
of  life,  or  their  standard  of  living — the  working  classes  pre- 
eminently. It  must  be  taken  for  granted  that  the  well-to-do 
classes  enjoy  in  all  times  and  zones  relatively  the  sum  and 
substance  of  comforts  known  to  their  age.  Varying  as  this 
standard  of  living  is,  varying  as  the  wants  of  nation  and 
nation,  time  and  time,  zone  and  zone  are,  so  we  find,  with  the 
greater  or  smaller  force  of  this  incentive,  activity  increase  and 
prevail  with  greater  or  smaller  force.  Under  this  varying 
standard  we  find  the  widest  divergence  both  in  the  demands 
of  the  laborer  and  in  the  product  of  his  activity  by  which  he 
supplies  these  wants.  What  by  one  would  be  considered  com- 
fort and  plenty,  another  nation's  standard  would  stamp  as 
poverty  and  want. 

If  we  have,  therefore,  no  common  standard  of  living,  of  the 
wants,  we  have  a  still  more  varying  standard  of  production,  of 
the  means  employed  for  supplying  the  wants.  The  results  of  a 
day's  labor  in  one  and  the  same  industry  per  hand  employed 
in  different  countries  are  of  a  most  diverging  nature.  In  one 
and  the  same  line  differences  are  so  pronounced  that  it  be- 
comes at  once  apparent  that  the  old  standard  of  measurement, 


326  APPENDIX  B. 

from  which  economic  deductions  have  usually  been  made,  the 
day  wages,  is  entirely  illusory.  The  means  employed,  the 
tools,  machines,  and  methods  are  seldom  the  same.  Even 
when  apparently  the  same  agents  and  methods  are  employed, 
on  examination  we  find  that  they  differ  in  their  nature,  or  em- 
ployment, or  in  both,  so  materially  that  no  reliable  comparison 
and  deductions  could  be  made  from  the  mere  fact  of  the 
employment  of  these  agencies  in  production. 

It  may  be  taken  for  granted  that  in  cotton  manufacture  the 
same  kind  of  machinery  is  employed  in  America,  England, 
Switzerland,  Germany,  and  France.  The  same  power  is  like- 
wise employed  for  speeding  the  machinery.  Steam-power  in 
England,  Germany,  and  France,  and  water-power  supple- 
mented by  steam-power  in  America  and  Switzerland.  The 
day  earnings  of  the  operatives  (weavers)  vary  so  much  between 
one  country  and  another,  that  weavers  in  Switzerland  earn  but 
z\  to  2-j  francs  (44  to  49  cents),  in  Germany  on  an  average  2 
marks  (48  cents),  in  French  mills  2f  to  3  francs  (53  to  58 
cents),  with  a  working  day  from  five  o'clock  in  the  morning  to 
half-past  seven  in  the  evening,  and  2^  hours  of  rest  in  the 
day  ;  in  England  about  65  cents,  with  nine  working  hours,  and  in 
America  from  80  cents  to  $1.12-^  a  day  of  ten  working  hours. 
(Average  85  cents,  taken  from  the  work  account  of  a  mill.)  If 
all  things  were  equal,  if  with  the  same  machines  and  working 
agencies  the  results  of  a  day's  work  per  hand  employed  were 
the  same,  of  course  the  countries  where  the  higher  earnings 
prevail  would  be  in  a  hopeless  condition  in  competing  with 
the  others.  The  above-mentioned  factors,  however,  exercise 
so  powerful  an  influence,  that  the  reverse  is  the  truth.  In  fact, 
the  cheapness  of  the  labor  product  stands  in  an  inverse  ratio 
to  the  weekly  earnings  of  the  operative.  The  cost  of  weav- 
ing— in  wages — of  one  kilogram  of  print  cloth,  15  \  yards, 
64x64  standard,  in  Switzerland,  is  50  centimes,  pf  cents,  or 
.606  cent  a  yard.  For  Germany  I  have  not  been  able  to  ob- 
tain data  for  this  count  and  width.  Printers  in  Mulhouse  and 


INFLUENCES  BEARING  ON  PRODUCTION. 


327 


Elberfeld  tell  me,  when  they  use  it  for  export,  they  get  it  mostly 
from  England, — a  drawback  of  the  duty  paid  to  the  govern- 
ment is  given  upon  re-exporting  the  prints.  This  sufficiently 
proves  that  the  cloth  cannot  be  made  at  less  cost  in  Germany. 
In  England  22d,  or  44  cents,  is  paid  per  cut  of  80  yards,  equal 
to  .55  cent  per  yard.*  In  America  20  cents  is  paid  per  cut 
of  50  yards  (from  another  source  I  have  18.15  cents  per  cut  of 
45  yards),  or  .40  cent  a  yard  as  the  weaver's  wages.  Putting 
daily  earnings  side  by  side  with  the  labor  cost  of  weaving 
we  have 


Daily  wages. 

Wage*  per 
100  yards. 

In  Switzerland, 
In  England.  .  .  . 

and  we  may  include  Germany.  . 

$0.44  to  $0.49 
o  6s 

$0.606 
O  55* 

In  America.  .  .  . 

0.85 

O.4O 

From  this  we  have  a  right  to  conclude  that  the  average  rate 
of  wages  customary  in  the  country,  the  supplying  of  the  wants 
and  necessaries  of  life,  must  have  a  direct  bearing  upon  the 
productive  power  of  the  people — the  operatives.  I  confine 
myself  here  strictly  to  this  induction — and  specific  case.  And 
here  this  is  demonstrable  to  an  absolute  certainty.  The 
number  of  looms  operated  by  one  weaver  is  : 

In  Switzerland  two  to  three  for  the  more  expert  weavers. 
In  Germany  and  France  two  and  very  seldom  three. 
In  England  three,  and  for  expert  weavers  four. 
And  in  America  six  to  eight  looms. 

The  work  account  of  a  mill  in  Lowell,  for  which  I  am 
indebted  to  the  kindness  of  the  lamented  Mr.  Dupee,  the  late 
treasurer  of  the  Hamilton  Mills,  gives  me 


232  girls  operating  6  looms. 
43     "  "  7 


20 
II 


and  only 
each. 


*  See  ante,  pp.  242  and  243  for  statement  giving  results  of  later  inquiry. 


328  APPENDIX  B. 

This  shows  that  the  high  standard  of  working  power  in 
America  is  very  widely  distributed.  The  speed  of  the  looms 
has  been  held  to  be  so  much  greater  in  England  than  in 
America,  that  thereby  the  advantages  gained  by  the  running 
of  a  greater  number  of  looms  by  one  hand  becomes  neutral- 
ized in  a  measure.  Even  this  I  do  not  find  to  be  the  case. 
In  America  180  picks  a  minute  is  the  average,  and  some  run 
as  high  as  210  picks  a  minute.  In  England  200  is  considered 
very  high  speed,  run  by  the  best  and  most  improved  looms. 
Whatever  objection  might  be  raised  on  this  point  would  be 
met  by  the  weekly  output  as  given  by  the  earnings,  which 
are  piece-price  earnings  and  not  day-wages.  In  England, 
taking  $3.90  as  the  average  of  weekly  earnings,  at  the  rate 
of  55  cents  per  100  yards  the  weekly  output  would  be  709 
yards  of  print  cloth.  In  Switzerland,  taking  $2.80  as  the 
average  earnings  of  weavers,  at  the  rate  of  60  cents  per 
hundred  yards  the  weekly  output  would  be  466  yards  ;  while 
in  America,  taking  6  looms  indicating  a  low  average,  or  $4.86 
(as  taken  from  the  pay-rolls  of  my  informant)  at  the  rate  of 
40  cents  per  100  yards  the  weekly  output  would  be  1,200 
yards  of  print  cloth  per  weaver.  (The  average  number  of 
looms  worked  in  this  mill  by  one  weaver  is  6^,  with  the 
earning  proportionately  raised  to  $5.08,  brings  the  output  to 
1,270  yards.)  In  the  spinning  of  the  yarn  for  this  cloth  I  find 
about  equal  cost  of  labor  per  pound  in  English  and  American 
mills  and  a  higher  cost  in  Switzerland.  The  time  earnings 
stand  relatively  in  the  same  positions  with  the  respective 
countries  as  in  the  weaving,  necessarily  indicating  higher 
individual  exertion,  skill,  energy,  or  whatever  term  we  may 
apply  to  cover  this  economic  manifestation. 

I  speak  here  of  a  branch  where  the  same  plant  and  technic 
is  assumed  to  be  used  by  competing  nations — enjoying  rela- 
tively the  greatest  amount  of  social,  intellectual,  and  political 
advantages  of  the  age — and  still  how  different  are  the  results 
of  exertion  aided  by  the  same  motors  and  appliances. 


INFLUENCES  BEARING  ON  PRODUCTION.  329 

If  equally  accurate  data  were  at  hand  for  the  lowest  stratum 
of  wage  earners — the  operatives  in  the  cotton  mills  of  India — 
a  still  stronger  verification  of  this  parallel  could  undoubtedly 
be  brought  out.  The  fact  of  the  great  spread  of  cotton 
manufacture  in  the  last  decade  is  attributed  to  the  low  wages 
and  to  the  depreciation  of  silver.  With  the  latter  imputed 
cause  I  have  not  to  deal  here,  though  I  may  say  incidentally 
that  the  price  of  cotton  in  Liverpool  or  Manchester  would 
never  be  affected  thereby  in  any  but  a  nominal  way.  Ten 
dollars  worth  of  India  cotton  would  bring,  let  us  say,  $7.00 
gold,  plus  freight  and  charges,  in  Liverpool,  and  re-exported 
to  Bombay  in  the  nature  of  yarn  or  cloth  be  again  $10.00  in 
silver  plus  labor — and  freight  and  charges.  The  differences 
in  exchange  could  only  bear  upon  the  added  items.  Freight 
charges  even  would  be  subject  to  the  same  nominal  influences 
as  the  price  of  cotton.  It  is  a  fact,  however,  that  India  works 
successfully  only  the  coarser  yarns,  Nos.  10  to  20,  where  the 
least  labor  is  expended  in  the  pound  of  cotton,  while  the 
finer  numbers  are  imported  from  England  in  a  larger  degree 
even  than  the  spread  of  Bombay  cotton  manufacture.  Now 
the  spinning  wages  in  one  hundred  pounds  of  cotton  yarn  in 
Fall  River  are  : 

For  No.  14 $0.33     For  No.  20  $0.45 

For    "     16 35     (And  in  Lancashire  for  No.  20.     .50) 

For    "     x8 40    For  No.  40 98 

India  has  the  seeming  advantage  of  freight.  The  average 
rate  of  freight  the  year  around  on  a  ton  of  cotton  from  Bom- 
bay to  Liverpool  is  225.  6d.  or  $5.46.  Freight  from  Liverpool 
to  Bombay  of  a  ton  of  yarn  is  12*.  6d.  or  $3.06,  total  $8.52,  or 
about  the  spinning  wages  in  Lancashire  and  Massachusetts 
for  the  coarse  numbers  made  in  Bombay.  This  apparent  pro- 
tection, however,  is  partly  offset  in  the  higher  cost  of  coal, 
higher  cost  of  mill  property  and  machinery,  superintendence, 
etc. 


330  APPENDIX  B. 

Practically  it  may  be  said,  therefore,  that  the  basis  of  cost, 
the  material,  upon  which  labor  operates  in  India,  offers  only 
these  advantages  to  the  home  spinner.  The  difficulties  of  the 
Bombay  manufacturer  increase  with  the  increase  in  the  ratio 
of  labor  to  the  pound  of  cotton.  There  the  greater  produc- 
tivity, relative  cheapness  of  high-cost  labor,  shows  itself  in  its 
greater  potency.  In  lieu  of  a  more  specific  and  more  closely 
defined  measure,  we  may  take  the  relative  output. 

A  mill  in  Bombay,  of  which  I  have  an  account,  of  35,000 
spindles,  turns  out  8,000  pounds  of  No.  20  yarn  a  day. 
Against  this  we  may  set  the  output  of  a  mill  in  Lawrence, 
which  produces  two  pounds  a  week  per  spindle  of  No.  18  to 
20  yarn.  For  35,000  spindles  this  would  represent  an  output 
of  70,000  pounds  in  Massachusetts  a  week,  against  one  of 
48,000  pounds  in  Bombay.  The  mill  in  Massachusetts,  how- 
ever, makes  miscellaneous  goods,  and  does  not,  as  the  super- 
intendent informs  me,  represent  as  high  a  working  capacity 
as  a  mill  would  which  runs  without  changing,  and  on  a  large 
scale,  the  same  numbers.  Such  a  mill  would,  therefore,  under 
more  favorable  arrangement,  represent  a  much  higher  working 
capacity.  We  can,  therefore,  deduce  from  this  that,  irrespective 
of  the  number  of  hands  employed,  for  an  equal  quantity  of 
work  produced,  the  same  plant  and  improved  machinery  turn 
out  in  a  given  time  a  very  much  greater  number  of  yards  of 
yarn  in  Massachusetts  than  in  the  cotton  mills  of  Bombay. 

If  this  be  so  when  we  deal  with  what  is  apparently  like  and 
like,  how  much  more  are  we  justified  in  expecting  quite  im- 
portant modifications  of  ruling  impressions  when  we  examine 
into  industries  which  are  conducted  among  different  nations 
by  entirely  different  methods.  Here  we  find  one  nation 
clinging  tenaciously  to  small  domestic  industries  ;  the  people 
work  in  family  groups,  or  masters  with  helpers  ;  some  still  em- 
ploy hand-tools  of  ancient  construction,  others  use  modern 
inventions  and  labor-saving  machinery  made  serviceable  for 
domestic  industry.  Along  with  this  the  factory  runs.  But 


INFLUENCES  BEARING   ON   PRODUCTION.  331 

even  here  the  use  made  of  machinery  is  quite  different  in  one 
country  from  what  it  is  in  another. 

Here  the  insufficiency  of  the  commonly  adopted  standard 
of  measuring  relative  efficiency,  /.  e.t  productivity  of  labor,  or 
cheapness,  by  the  rate  of  wages,  becomes  more  distressing  yet. 
In  a  sense  more  closely  allied  in  methods  of  proceeding  to  the 
just-mentioned  industry  than  what  I  shall  point  out  below  is 
calico  printing.  In  Elberfeld  and  Mulhouse  the  work  is  con- 
ducted practically  on  the  same  principle  as  in  Lowell,  Fall 
River,  Providence,  etc.,  by  printing  machines  with  engraved 
copper  rollers  driven  by  steam.  Yet  I  was  told  by  owners  of 
extensive  print  works  at  both  places  in  Germany,  that  it  is 
useless  for  them  to  attempt  competition  with  America  in 
neutral  markets  ;  that  they  had  lost  the  Mexican  market,  and 
would  run  the  same  risk  elsewhere  where  American  cloth, 
width  and  quality,  have  established  markets.  They  cannot 
compete  in  price.  From  the  rate  of  wages  standard  this 
would  seem  incredible.  In  Lowell  print-works  which  I 
visited,  a  printer  gets  $4.50  a  day.  In  Mulhouse  not  above 
one-third  ;  in  Elberfeld  not  much  over  one-fourth  would  be 
the  day  wages  of  a  printer.  Truly  a  formidable  difference. 
When,  however,  we  know  that  one  printer  at  $4.50  and  a 
helper  at  $1.50  suffice  to  tend  one  printing  machine  ;  and  that 
one  printing  machine,  printing  up  to  three  or  four  colors,  turns 
out  daily  400  pieces  of  print  of  50  yards,  or  20,000  yards  ;  and 
in  prints  used  for  furniture,  etc.,  with  eight  to  twelve  colors 
printed  simultaneously,  250  pieces  or  12,500  yards,  then  we 
see  how  immaterial  the  question  is  whether  the  wages  for 
tending  the  printing  machine  are  $6,  $3,  or  $4,  .03,  .015,  or 
.02  cents  per  yard.  The  labor  cost  becomes  here  a  vanishing 
quantity  on  the  one  side,  while  on  the  other  side  causes  may 
come  in  which  make  it  an  important  factor,  even  if  nominally 
of  a  very  low  rate.  The  German  printers  say  they  cannot 
work  on  the  American  basis  of  running  for  days  and  weeks 
one  pattern  on  one  machine.  They  have  to  run  much  slower, 


332  APPENDIX  B. 

use  more  time  and  care.  They  have  to  collect  their  trade 
from  almost  every  country  in  the  world.  It  comes  in  dribblets. 
They  have  to  accommodate  themselves  to  everybody's  whims, 
make  patterns,  styles,  and  colors  for  every  zone  and  taste. 
The  large  trade  is  in  the  hands  of  England,  and  they  can  only 
obtain  and  retain  trade  by  ready  acquiescence  to  all  the 
exactions  of  fashion  in  the  finer  prints  or  national  predilec- 
tions in  the  cheaper  goods.  This  not  alone  increases  the  cost 
of  production,  but,  perhaps  to  a  greater  extent  yet,  the  cost  of 
distribution,  and  may  be  called  a  new  element  of  disturbance 
in  making  comparisons  in  like  industries  among  different 
nations.  Methods  in  distribution  as  well  as  methods  in  pro- 
duction. They  are  dissimilar  in  every  country,  and  both  have 
their  influence  on  prices  and  cost  of  production. 

Along  with  this  advanced  system  of  printing,  bearing  such 
different  results  so  far  as  price-making  is  concerned,  runs 
block  printing  yet  to  a  considerable  extent.  Apparently  hope- 
lessly expensive  if  brought  in  competition  with  roller  printing 
— still  under  certain  conditions  it  may  be  much  cheaper — or 
no  other  process  applicable.  Roller  printing  would  be  ruin- 
ously expensive  in  a  small  output  or  applied  to  a  small  industry 
of  a  changeable  nature. 

We  have  found  all  of  these  divergences  in  reviewing  manu- 
facturing conducted  by  similar  methods.  How  much  greater 
must  we  expect  these  divergences  to  be  when  we  compare 
production  conducted  here  by  an  industrious  toiler  with 
his  hand  tools  ;  there  with  improved  hand  machinery  ;  and 
in  another  place  by  minute  subdivisions  of  the  best  organized 
labor,  aided  by  machinery  of  the  subtlest  construction  or 
by  automatons,  which  with  iron  teeth  and  fingers  cut  steel 
and  copper,  turn  screws,  nails,  pins,  make  the  heads,  sharpen 
the  points,  and  drop  the  finished  work  into  a  ready  receptacle, 
or  cut  iron  and  twist  and  knit  it  into  chains,  etc.  The 
labor  employed  here  consists  simply  in  putting  a  coil  of  wire 
or  a  rod  of  steel  or  copper  into  the  machine,  which  then  does 


IXFLUENCES  BEARING  ON  PRODUCTION.  333 

all  the  work  with  greater  regularity  and  precision  than  the 
most  skilled  workman  could  do  by  hand.  In  more  compli- 
cated work  than  the  making  of  these  units  great  skill  is 
required  of  the  workers  under  both  systems.  Still  it  is  skill 
of  quite  a  different  nature — the  one  in  doing  one  and  the 
same  kind  of  work  repeatedly  day  in  and  day  out,  like  the 
automaton  which  makes  the  parts  ;  the  other  in  making  a 
complete  piece  of  assembled  parts  inclusive  of  the  parts. 
Great  as  the  skill  and  technical  knowledge  must  be  of  making 
a  complete  piece  of  so  fine  and  subtle  a  mechanism  as  a  watch 
or  a  clock  by  hand  with  hand  tools,  the  skill  required  in  the 
manipulation  of  the  other  system  is  of  an  equally  high  though 
of  a  different  character.  In  the  assembling  room  of  an 
American  clock  factory  I  found  one  girl  putting  together  the 
parts  of  240  movements  as  one  day's  work.  This  requires 
great  dexterity  and  exactness.  The  work  in  all  the  manipula- 
tions is  paid  for  by  the  piece.  High  earnings  can  only  be 
obtained  by  great  quickness,  deftness,  and  uninterrupted 
attention  and  application,  qualities  which  again  can  be  sup- 
plied by  none  but  the  best  conditioned  labor,  enjoying  the 
highest  standard  of  living.  Nowhere  is  so  high  a  degree  of 
intelligence  and  brightness  in  manner,  looks,  and  appearance 
observable  among  work  people  as  where  these  conditions 
prevail  ;  where  the  highest  known  earnings  in  like  industries 
lead  to  the  lowest  cost  of  labor.  A  clock  is  sold  at  90  cents, 
an  alarm-clock  is  sold  at  retail  at  $1.25,  a  Waterbury  watch  at 
$2.50.  It  is  the  surprise  of  Europe.  The  factory  sells  it  at 
$1.50  to  the  retailer.  On  a  recent  visit  to  the  factory  I  was 
shown  all  the  numerous  operations  of  the  manufacturing  pro- 
cess. The  material  is  all  worked  from  the  plainest  condition. 
It  enters  the  factory  as  rolled  steel  and  brass,  and  sheet-iron, 
and  leaves  it  as  a  well-regulated  watch  in  a  pasteboard  box 
lined  with  colored  satin.  The  making  of  the  spring,  of  the 
wheels,  screws,  pins,  pinions,  the  perforating  of  the  plates,  etc. ; 
the  assembling,  the  finishing,  the  regulating,  all  are  done  with 


334  APPENDIX  B. 

as  much  care  and  precision  as  if  for  a  piece  of  five  times  the 
value.  Yet  all  these  collected  processes  do  not  cost  in  labor 
more  than  50  cents  a  watch.  The  company  has  a  pay-roll  of 
$4,500  a  week,  and  turns  out  1,500  watches  a  day,  or  9,000 
a  week,  which  makes  the  labor  exactly  as  stated.  The 
machinery  is  as  interesting  a  study  as  the  labor  employed  in 
the  making  and  finishing  of  this  product  of  skill  and  enter- 
prise. The  number  of  people  employed  in  the  factory  is  420, 
fully  one-half  of  whom  are  women.  The  average  earnings  are 
$10.71,  which  is  about  four  times  as  high  as  in  the  Black 
Forest  or  in  Switzerland.  Here  the  lower  cost  is  not  due  to 
cheap  wages,  but  to  excellent  machinery  and  skill,  and  great 
quickness  of  labor  employed  at  a  very  low  cost  by  the  piece. 
The  great  variety  and  complexity  of  machinery  and  conse- 
quent great  expense  of  plant  can  be  borne  profitably  because 
of  the  very  large  output.  The  labor,  the  machinery  turning 
uninterruptedly  the  same  work,  is  here  employed  and  utilized 
to  the  full.  Improvements  in  machinery  follow  on  one 
another's  heels  when  they  are  so  profitable  that,  for  instance, 
two  machines  and  two  men  make  1,200  to  1,500  springs  a  day, 
while  a  short  time  ago,  on  now  obsolete  machinery,  it  took 
twelve  men  to  turn  out  1,000  springs.  Neither  in  the  Black 
Forest  nor  in  Geneva  have  I  seen  machinery,  meant  for  the 
same  purpose,  utilized  in  any  way  approaching  that  in  which 
it  is  utilized  in  America.  Nor  does  hand  labor  move  with  the 
swiftness  of  hand  labor  in  American  factories.  Here  it  is  also 
a  matter  of  minor  significance  that  a  girl  gets  $9  to  $10  a 
week,  when  she  is  thereby  enabled  to  fasten  the  wheel  in  1,600 
watch-cases,  handling  four  pieces  in  each  case  (the  wheel,  two 
washers,  and  the  pinion  wire),  as  a  day's  work.  Only  with 
such  labor,  appliances  and  systematizing  is  it  possible  to  make 
a  watch  containing  58  pieces,  which  collectively  have  passed 
through  370  single  operations,  at  so  abnormally  low  a  price. 
The  relative  indifference  of  high  day  wages  when  brought 
side  by  side  with  such  astonishing  results  is  more  apparent 


INFLUENCES  BEARING  ON  PRODUCTION.  335 

yet  when  we  deal  with  industries  where  automatic  machinery 
is  employed  almost  exclusively,  screw-making,  nail-making, 
pin-making,  etc.  In  the  latter  industry  the  coil  of  brass  wire 
is  put  in  its  proper  place,  the  end  fastened,  and  the  almost 
human  piece  of  mechanism,  with  its  iron  fingers,  does  the  rest 
of  the  work.  One  machine  makes  180  pins  a  minute,  cutting 
the  wire,  flattening  the  heads,  sharpening  the  points,  and  drop- 
ping the  pin  in  its  proper  place.  108,000  pins  a  day  is  the 
output  of  one  machine.  A  factory  visited  by  me  employed  70 
machines.  These  had  a  combined  output  per  day  of  7,500,000 
pins,  or  300  pins  to  a  paper — 25,000  papers  of  pins,  allowing 
for  stoppages  and  necessary  time  for  repairs — say  20,000 
papers.  These  machines  are  tended  by  three  men.  A 
machinist  with  a  boy  helper  attends  to  the  repairing.  It 
will  not  materially  influence  the  price  of  pins  whether  the 
combined  earnings  of  these  five  men  be  $7.50  or  $10  per  diem. 
The  difference  would  amount  to  one-eighth  of  a  cent  on  a 
paper  of  pins.  The  likelihood  is  that  when  cheaper  help  is- 
employed  a  greater  number  of  hands  would  be  employed  for 
the  same  work  and  the  same  output. 

This  applies  to  all  industries,  but  principally  to  those  which 
can  be  conducted  by  highly  developed  and  organized  labor. 
The  boot  and  shoe  industry  is  a  brilliant  example.  I  found 
on  samples,  the  products  of  Lynn  factories,  which  I  had 
brought  with  me  for  comparison,  that  no  foreign  manufacturers 
were  able  to  compete  with  American  factories  in  the  cheap- 
ness of  the  labor  price.  Here  at  Lynn  a  pair  of  ladies'  gaiters 
is  made  as  low  as  35  cents  for  the  labor,  including  the  making 
of  24  buttonholes  and  sewing  on  of  buttons,  and  in  country 
shops  as  low  as  25  cents  for  the  same  kind  with  about  10  but- 
tonholes in  each.  I  made  comparisons  in  different  places.  In 
Vienna,  in  Berlin,  in  Frankfort,  and  in  Offenbach  I  found  the 
labor  cost  to  be  double,  while  the  earnings  were  less  than  half 
what  they  are  here.  In  Erfurt,  where  wages  are  lower  yet 
than  in  any  of  the  mentioned  places,  the  cost  is  lower  ;  but  the 


336 


APPENDIX  B. 


goods  are  inferior,  and  still  fully  60  per  cent,  higher  in  the 
labor  cost  than  in  my  sample  of  country-shop  gaiters  of 
American  manufacture.  The  factories  work  with  American 
machines,  but  the  output  falls  way  behind  ours.  Along  with 
this  a  great  deal  of  handwork  made  in  the  homes  of  shoe- 
makers— domestic  industry — is  run  in,  both  for  export  and 
home  trade.  I  do  not  enter  into  an  explanation  of  these 
phenomena  here,  neither  their  bearings  or  their  causes.  I 
shall  in  a  later  report,  with  fuller  data,  attempt  to  point  out  the 
causes  which  produce  these  varying  effects.  I  only  desire 
now,  in  a  cursory  review  of  the  methods  under  which  the 
world's  industries  are  conducted,  to  enforce  the  necessity  of 
conducting  investigations  specifically,  and  not  from  a  "  gen- 
eral average  "  standpoint,  which  necessarily  leads  to  erroneous 
deductions. 

To  show  the  extent  to  which  industrial  production  persists 
in  the  line  marked  out,  I  point  to  Germany,  certainly  now 
one  of  the  most  progressive  states.  Still,  according  to  the 
Industrial  Census  of  1882,  more  than  one-half  of  all  its 
population  engaged  in  manufactures,  where  small  groups  of 
workers  can  at  all  be  employed,  were  employed  in  groups 
of  less  than  five  to  each  establishment.  In 


A  Total  of 

Worked  in 
groups  of  less 
than  5  persons 

Worked  in 
groups  of  more 
than  5  persons 

In  nietals  

45n  711 

298  125 

161  588 

•^6.080 

127,565 

228.5  24 

In  chemicals  

71  777 

16  867 

C4  QIO 

In  textiles  

QIO  080 

44O  <;71 

460  Si6 

In  paper  and  leather  industries  

221  688 

IO7.2Q1 

114  1QS 

460.  60,5 

167  688 

IO2,OO7 

In  nutriments   food  and  drink  

741  88l 

468  652 

275  22Q 

Total  

1,212  Q12 

1,826,763 

1,406,169 

INFLUENCES  BEARING  ON  PRODUCTION. 


337 


Organizations  large  enough  for  profitable  employment  of 
power  machinery  would  have  to  be  aggregates  of  many  more 
than  five  persons.  The  number  of  people  employed  in  domes- 
tic industries,  those  working  in  their  own  homes,  for  account 
of  business-houses,  merchants,  exporters,  or  manufacturers,  is 
very  large.  A  total  of  754,550  persons  are  so  engaged.  The 
kingdom  of  Saxony  alone  employs  138,000  persons,  and 
Rhenish  Prussia  and  Westphalia  102,000,  in  domestic  indus- 
tries. 230,000  are  engaged  in  textiles,  mostly  in  weaving. 
Hosiery  still  occupies  over  40,000  people  in  house-industry. 
The  principal  lines  in  textiles  occupy  in  home-industries  the 
following  position  ;  I  set  side  by  side  the  total  of  all  engaged 
in  the  representative  branches  : 


Percentage  of  all  Employed. 

Engaged  in 
House-Indus- 
tries. 

Total  in 
Industry. 

Per 
Silk  weaving  and  velvet  (Rhenish  Prussia,  49,- 
022)  

cent. 

70 
22 
40 
•42 
30 

55 

53,286 
23,799 
4L045 
52,295 

22,212 
40,528 

76,264 
108,007 
103,808 

125,591 
73,750 

73,828 

\Voollen  weaving  

Linen           "        

Cotton         "        

Mixed  goods  weaving   

Knit  goods,  hosiery  (kingdom  of  Saxony  alone, 
lo.sn)  •  . 

Total  

42 

233,165 

561,248 

In  woollens  22  per  cent.,  in  mixed  goods  30  per  cent.,  in 
cotton  42  per  cent.,  in  silk  70  per  cent.,  and  in  knit  goods  55 
per  cent,  of  all  weavers  are  still  plying  their  looms  or  work 
their  frames  in  their  own  homes  in  the  fashion  of  the  fathers. 

In  boots  and  shoes,  of  398,757  shoemakers,  only  25,768 
work  in  groups  of  more  than  five  persons.  But  even  these  are 
not  of  a  higher  ratio  than  14,  being  distributed  over  1,839 
establishments. 

In  metals,  a  line  where  so  much  of  our  automatic  machinery 
is  so  tellingly  employed,  the  employment  groups  are  of  an 
equally  low  ratio. 


338 


APPENDIX  B. 


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£"«•! 

"3 

£ 

2 

"o 

°  a,-3 

o 

H 

t« 

Q 

C    3   fl 

H 

c 

c 

^ 

15  1,8 

Coppersmith  ware  

9108 

6  O4O 

2,258 

TJ7 

I  r 

Lead  and  tinware  

,  i  vyu 

4,610 

**l  V-TV' 
2,158 

2.452 

14/ 

J  D 
22 

Composite  metals  

•30  ocn 

7  4IO 

22  60^ 

760 

2O 

Tinsmith  ware  

j*-')^-"-'  j 
46,  158 

/  »H 
14  884 

t.*.  )\j\j  3 
1  1,274 

^y 

Nails,  screws,  etc  

21.600 

J*T»  •-"-'-t 
11.784 

11,825 

267 

* 

Safes  and  heavy  ironware,  blacksmith- 

*•*?!  ^  ^ 

*  1  /  *"f 

•**  / 

ing   etc  

6^  467 

5  I    127 

12  34O 

O76 

12 

Cutlery   etc  

^ji^t^/ 
55,889 

D  A  »  A  *•  1 
•21     -!I2 

2t   577 

y/w 

821? 

26 

Watch  and  clock  making  

26,208 

J-+»  J  L  • 
2I,IOO 

^x  O  /  / 

5,108 

u^3 
1  16 

•3-1 

Mathematical  instruments,  &c  

7  482 

-1  jw 

•^84 

J  J 
2O 

/  »"T^** 

J^T- 

If  the  classification  into  groups  were  carried  farther  than 
"  groups  above  5,"  and  groups  of  5  to  10  and  of  10  to  20 
were  given,  we  should  see  plainly  what  the  above  figures 
indicate — the  small  number  of  people  employed  in  establish- 
ments conducted  on  a  basis  large  enough  to  make  production 
on  the  plan  on  which  it  is  conducted  mainly  in  America  at 
all  possible. 

If  these  illustrations  and  figures  prove  anything,  they  prove 
beyond  doubt  the  necessity  of  basing  comparisons  on  homo- 
geneous positive  facts. 

It  is  a  common  belief  that,  with  the  rapid  exchange  of  ideas, 
the  closer  relations  of  nations,  characteristic  of  our  age,  the 
methods  and  systems  under  which  work  is  conducted  by  an 
industrially  more  advanced  nation  Avill  soon  be  taken  up  by 
all  competitors.  Measurably  this  may  be  true  ;  so  far  as  out- 
side appearances  go,  even  to  an  appreciable  extent.  On 
close  examination  we  find,  however,  that  the  thick  crust  of 
imperturbability,  of  national  predilections  is  not  easily  pene- 
trated by  new  ways,  methods,  and  ideas.  Many  counteracting 
influences  have  to  be  overcome  before  one  nation's  system  of 


INFLUENCES  BEARING   ON  PRODUCTION.  339 

work  will  perform  the  same  result  after  adoption  by  another. 
The  spring  to  man's  activity,  to  the  exercise  of  all  his  functions, 
lies  deeper  than  that  mere  arbitrary  will  or  individual  action 
exercised  from  without  could  effect  rapid  and  violent  changes. 
While  these  differing  features  in  the"  productive  methods  of 
nations  are  visible  at  a  first  glance,  it  is  evident  that  produc- 
tion must  also  be  largely  influenced  by  them  ;  preeminently, 
production  taken  quantitatively.  But  much  as  the  results  of 
labor  measured  by  numbers,  length,  or  whatever  term  may  be 
called  in  for  covering  dimensions,  may  be  influenced  by  the 
methods  and  factors  mentioned,  the  side  which  cannot  be 
measured  by  the  common  standard,  the  side  appealing  more 
directly  to  the  eye — taste — is  still  more  greatly  influenced  by 
these  national,  popular,  latent  instincts.  It  would  be  useless 
to  expect  of  one  nation  the  same  coloring,  expression,  orna- 
ment, or  artistic  production  as  from  another.  In  one  the 
sense  of  color  predominates,  in  another  the  sense  of  form. 
Here,  more  than  in  any  other  side  of  production,  the  national 
habits,  the  means  and  methods  exert  a  great  influence.  Here, 
in  quite  a  number  of  instances,  the  same  results  could  not  be 
obtained  by  any  other  method  than  the  prevailing  one.  We 
cannot  expect  production  mainly  conducted  by  machinery,  or 
with  an  eye  to  turning  out  big  quantities,  to  cover  the  same 
ground  or  bring  out  like  results  as  where  painstaking  regu- 
larity, inherited  skill,  and  an  intuitively  trained  eye  direct  the 
hand  of  the  worker  tied  to  his  domestic  industry  and  produce 
an  individualization  of  products  not  obtainable  otherwise.  In 
one  country  the  traditions,  habits,  and  aims  of  government 
unite  to  make  the  people  persevere  in  the  old  methods.  The 
small  industry  of  the  craftsman,  the  hand-loom  weaver,  the 
decorator,  the  metalworker  in  his  own  smithy,  the  domestic 
industry  is  fostered  and  considered  the  ultimate  goal  to  which 
we  have  to  return  again.  In  another  country,  where  traditions 
and  habits  do  not  so  strongly  point  in  that  direction,  industry 
is  left  more  to  itself  to  shape  its  own  course.  Everywhere, 


340  APPENDIX  B. 

however,  we  detect  the  most  varied  manifestation  of  national 
activity.  The  methods  by  which  production  is  carried  on  are 
as  varied  as  the  products  themselves.  Different  as  these  are 
in  all  respects,  it  is  as  unreasonable  to  expect  of  one  nation 
the  same  work  and  results  as  of  another,  as  it  would  be  useless 
to  engraft  upon  one  nation  an  exact  copy  of  the  methods  of 
another  because  the  latter  have  been  found  to  bring  out  good 
results  there. 

What  can  be  said  of  the  methods  of  industrial  life  and  work 
can  also  be  said  of  the  school,  and  here  especially,  the  schools 
for  Technical  Education.  To  understand  properly  their  aims 
and  directions  and  the  degree  of  their  utility,  it  is  above 
all  necessary  to  study  the  various  phases  of  industrial  develop- 
ment among  the  different  nations.  The  lessons  of  life  are  as 
essential  in  Technical  Education  as  of  the  school  ;  the  school 
is  to  give  idea,  direction,  and  elevation  to  industry,  to  raise  the 
standard  of  the  work  by  raising  the  standard  of  the  worker. 
The  school  at  best  is  a  means  to  an  end,  be  that  means  ever 
so  powerful.  It  would  be  difficult  to  understand  the  bearing 
of  this  means,  without  thoroughly  inquiring  into  the  social 
and  economic  fabric  of  the  nation  whose  system  of  Technical 
Education  we  study.  The  shop,  therefore,  gives  perhaps  a 
clearer  insight  into  the  makeup  of  this  fabric  than  the  school. 
The  school  very  often  is  a  creation  from  without,  or  an  en- 
grafted branch,  not  always  sure  to  bear  the  fruit  expected. 
The  shop  has  grown  and  developed  upon  nature's  own  soil. 
We  know  little  of  a  nation  if  we  do  not  see  it  at  work.  We 
know  little  of  the  utility  of  systems  of  Technical  Education 
unless  we  know  also  this  phase  of  it  upon  which  it  is  to  operate. 

With  so  extended  a  subject  to  investigate  and  to  report 
upon,  I  assumed  that  the  Department  did  not  expect  me  to 
complete  the  inquiry  in  the  brief  period  assigned,  afterward 
extended,  but  to  gain  a  general  knowledge  of  the  industrial 
conditions  and  of  the  state  of  Technical  Education  in  the  most 
advanced  countries,  and  to  leave  to  a  later  period  the  institu- 


INFLUENCES  BEARING  ON  PRODUCTION.  34! 

ting  of  more  minute  inquiries.  I  found  it  useful,  before  pro- 
ceeding to  a  report  upon  any  branch  of  my  inquiry,  to  have 
procured  as  much  general  knowledge  of  the  subject  by  travel 
and  direct  investigation  as  was  possible  in  the  limited  time, — 
limited,  necessarily,  by  the  school  year  terminating  in  July  for 
general  and  technical  education,  and  for  many  industrial  and 
trade  schools  as  early  as  the  Easter  vacation.  A  primary 
review  of  the  whole  field  was  necessary,  merely  to  enable  me 
to  decide  to  which  nation's  system  to  devote  the  first  part  of 
my  general  report. 

I  visited  France,  the  western  part  of  Switzerland,  Germany, 
a  part  of  Austria,  Belgium,  Holland,  and,  on  my  return  from 
a  second  visit  to  France,  parts  of  England  and  Ireland.  I 
became  impressed  with  the  fact  that  the  elements  of  Technical 
Education  upon  the  broadest  basis  imaginable — the  public 
schools — were  more  thoroughly  distributed  in  France  than  in 
any  other  country  in  Europe  which  I  had  visited.  I  deemed 
it  of  value  to  devote  my  first  report  to  Technical  Education 
in  France.  The  public  schools  of  France  are  of  recent  crea- 
tion. The  statesmen  organizing  the  system  could  study  the 
systems  of  all  the  advanced  nations,  and  select  the  best  and 
most  fruitful  methods.  Even  from  the  results  of  private  and 
isolated  attempts  it  became  evident  to  them  what  an  efficient 
guide  and  lever  of  a  child's  understanding  it  would  be  to  have 
its  sense  of  form,  of  color,  of  outline  and  proportion,  trained 
at  an  early  age  to  cultivtae  a  knowledge  and  love  of  work 
under  the  guidance  of  practised  teachers  able  to  direct  it 
playfully  in  the  elements  of  handicraft  and  of  art.  It  was 
found  that  a  nation  endowed  with  a  larger  degree  than  any 
other  with  a  sense  of  color,  with  intuitive  skill  in  assembling 
and  arranging  parts  into  a  harmonious  pleasing  whole,  was 
losing  ground.  Nations  which  a  generation  ago  were  not  con- 
sidered formidable  competitors  were  making  heavy  inroads 
even  in  what  France  used  to  consider  her  own  special  domain. 
It  was  held  that  this  was  due  to  the  influence  of  education,  to 


342  APPENDIX  B. 

the  more  thorough  training  of  mind  and  eye,  to  the  art  schools 
and  industrial  schools  which  had  taken  so  rapid  a  development 
in  neighboring  countries. 

But  whatever  may  have  impelled  them  to  action,  the  states- 
men of  France  planted  upon  a  wider  basis  than  the  neighbors 
from  whom  they  could  borrow  and  profit.  They  made  the 
public  school  system  the  instrument  for  laying  the  ground- 
work of  technical  knowledge  in  the  make-up  of  the  future 
workmen.  One  may  assume  that  institutions  for  artistic, 
technical,  and  scientific  instruction  are  either  as  a  rule  quickly 
introduced  wherever  the  need  of  them  is  manifested,  or,  as 
lending  lustre  to  the  fame  of  rulers  and  statesmen,  have 
always  received,  and  always  may  be  expected  to  receive,  due 
attention  from  the  powers  that  be.  The  masses,  the  nation, 
the  millions  of  workers  are  not  reached  thereby.  They  are 
not  reached  by  technical  high-schools,  academies,  or  schools  of 
industrial  art.  A  nation  of  indifferently  trained  workmen 
may  co-exist  with  a  very  efficient  and  even  brilliant  corps  of 
directors  and  leaders  educated  in  these  institutions.  To 
bridge  this  gulf  was  the  avowed  aim  in  France.  How  far 
the  French  system  will  succeed  in  this  the  near  future  will 
demonstrate.  One  visiting  schools  and  workshops,  observing 
the  young  and  the  adult,  could,  however,  not  fail  to  carry 
away  with  him  the  impression  that  a  great  revolution  was  pre- 
paring in  the  mental  make-up  of  the  nation,  proving  the  wisdom 
of  this  new  departure  in  education. 

From  this  brief  explanation  it  will  appear  logical  that  I  com- 
mence my  report  with  a  description  of  the  French  system,  and 
then  describe  the  systems  of  other  nations,  where  other  con- 
ditions and  institutions  prevail  and  cover  ground  perhaps 
left  untrodden  in  this  first  report.  The  systems  of  Technical 
Education  differ  nearly  as  widely  as  the  methods  and  systems 
of  work.  Each  has  its  lessons,  and  in  each  will  be  found  worthy 
subjects  and  examples  for  study  and  imitation,  modified,  per- 
haps, according  to  the  differing  conditions  which  they  are  to 
serve,  and  which  call  them  to  their  aid. 


INFLUENCES  BEARING  ON  PRODUCTION.  343 

It  would  be  premature  were  I,  at  this  stage  of  my  inquiries, 
to  speak  of  these.  My  inquiries  have  not  been  terminated. 
They  were  sufficiently  comprehensive,  however,  to  enable  me 
to  view  the  part  submitted  from  the  standpoint  gained  by  a 
•general  acquaintance  with  the  wider  subject.  This  enabled 
me  to  decide  upon  the  method  of  proceeding,  and  upon  the 
scope  and  sequence  of  the  reports  necessary  to  cover  the  in- 
vestigation assigned  to  me. 

The  present  report  will  be  followed  by  reports  on  Technical 
Education  in  Germany,  Switzerland,  Austria,Belgium,  Holland, 
and  Great  Britain.  Another  report  planned,  for  which  I  am 
collecting  the  data,  and  a  necessary  parallel  of  this,  is  a  report 
on  "  The  methods  employed  in  production  in  different  coun- 
tries." The  methods  employed  in  production  by  different 
nations,  and  the  results  in  competing  industries,  are  very  im- 
portant subjects  of  study.  It  will  be  readily  understood  that 
the  inquiry  must  be  extended  over  the  same  field  in  the. United 
States.  A  general  review  will  then  enable  us  to  perceive  what- 
ever may  be  of  advantage  for  us  to  adopt.  We  shall  easily 
discover  by  comparison  our  points  of  weakness  and  of 
strength. 

For  this  reason  I  have  refrained  from  making  any  sugges- 
tions. It  is  essential  in  the  first  instance  to  collect  the  facts 
not  alone  of  Technical  Education,  but  of  the  whole  broad 
subject,  the  facts  underlying  the  economy  of  industrial  life. 

Our  literature  is  as  full  of  the  philosophy  of  industrial  life 
as  it  is  wanting  in  facts  regarding  it — facts  as  they  present 
themselves  under  the  influence  of  modern  development.  We 
have,  therefore,  to  gather  the  data,  collect  the  facts  of  produc- 
tion with  careful  minuteness.  The  economy  of  production 
with  careful  minuteness.  The  economy  of  production  will 
have  to  be  treated  in  the  same  analytical  manner  of  investiga- 
tion by  which  all  the  natural  sciences  have  made  such  won- 
derful progress  within  the  last  fifty  years.  National  biology 
is  as  truly  a  positive  science  as  individual  biology.  Abandon- 
ing the  hazy  abstractions  of  the  speculative  past,  science  has, 


344  APPENDIX  B. 

by  the  aid  of  the  microscope,  the  balance,  and  the  retort, 
brought  to  light  some  of  nature's  most  deeply  hidden  secrets. 
Under  the  results  of  this  great  scientific  upheaval,  life  has  be- 
come a  changed  condition.  Industrial  life,  conditions  and 
means  governing  production,  transportation,  distribution,  all 
have  experienced  changes  as  pronounced  as  are  the  differences 
between  the  life  and  aspiration  of  the  American  mechanic  and 
the  life  and  aspiration  of  the  Hindoo  workman.  The  applica- 
tion of  electricity  and  steam  power  to  production  and  trans- 
portation has  revolutionized  industrial  and  economic  condi- 
tions and  the  lives  and  prospects  of  the  working  classes  to  a 
greater  degree  than  any  other  event  in  the  history  of  man. 
Still  it  is  not  too  much  to  say  that  the  economic  generali- 
zations of  the  day  are  largely  founded  on  the  facts  of  a 
past  era. 

Incontrovertible  evidence  of  the  facts  of  industry,  of  pro- 
duction, its  means  and  methods,  cost  and  conditions  among 
different  nations,  and  the  results  to  the  working  classes  derived 
therefrom,  if  it  corroborates  what  has  been  stated  above,  will 
contribute  most  powerfully  toward  a  happy  solution  of  what  is 
the  great  question  of  the  day  all  over  the  civilized  world. 

From  this  view  facts  are  the  only  essentials.  The  collection 
of  facts  must  for  some  time  occupy  the  attention  of  public 
authorities.  I  have  the  honor  to  be,  sir,  etc. 


INDEX. 


Absolutism    succeeding    feudalism, 

294 

Agricultural  laborers,  Wages  of,  196 
Agricultural  land,  Price  of,  178 
Agricultural  states  and  trade,  57 
Agriculture  and  science,  253-270 
Agriculture,  State  of,  136,  154,  181, 

192 

Alluvial  gold  deposits,  47 
American  farming,  273 
Animals,  Price  of,  108,  122 
Assignats,       French,      Decline     in 

value,  6 
Augsburg,     Leading     position     of, 

73-85 

Aureus,  The,  38,  92 
Australian  silver  product,  52 

B 

Bacon,  Price  of,  22 

Banks,  85 

Barley,  Price  of ,  119,  135,  153,  157, 

182,  194,  205,  206,  320,  321,  322 
Beans,  Price  of,  119,  135 
Beef,  Price  of,  22,   106,   138,   162, 

210 
Bei  n ,  Louis,  Die  Industrie  des  saech- 

sischen  Voigtlandes,  227,  229,  322 
Beissel,    Stephan,     Geldwerth   und 

Arbeitslohn  im  Mittelalter,  80,  96, 

203,  204,  206,  210 
Bell,  Sir  I.  Lowthian,  258,  264 
Bergier,  Histoire  des  Grands   Che- 

mins  de  V Empire  Romain,  282 
Bimetallism,  26 


Blacksmiths,  Wages  of,  216 
Boars,  Price  of,  122,  138 
Boeckh,  The  Economy  of  the  Athe- 
nians, 1 08 
Bohemia,  Low  wages  and  high  cost, 

233 
Bolles,  Albert  S.,  Financial  History 

of  the  United  States,  4 
Bonnemere,  Histoire  des   Paysans, 

187 

Bread,  Price  of,  107,  157,  183,  195 
Brentano,  Lujo,  Relation  of  Wages 

to  the  Product  of  Labor,  227 
Bricklayers,  Wages  of,  125,  142,  15$ 
Bricks,  Price  of,  124,  141,  209 
Bulk  and  freight,  281 
Butter,  Price  of,  22,  103,  123,  138, 

160,  164 


Candles,  Price  of,  124,  141 
Capitularies,  Carlovingian,  37 
Carlovingian  coins,  90,  91,  92,  99, 

175 
Carpenters,  Wages  of,  125,  142,  158, 

196,  206,  216,  236,  312-314 
Carrying  trade,  The,  in  past,  288 
Cattle,  Increase  of,  107 
Changing  relation  of  silver  to  gold, 

42-44,  203 
Cheese,  Price  of,  22,  103,  123,  138, 

164 

Chevalier,  Michel,  21 
Chickens,  Price  of,  210 
Cicero,  Transfer  of  credit  by,  58 
Cinnamon,  Price  of,  130,  146,  170 


346 


INDEX. 


Cloth,  English,  Low  character  of,  in 
Middle  Ages,  no 

Cloth  industry,  The,  in  France,  297 

Cloth,  Price  of,  105,  128,  144,  169, 
200,  2ii 

Cloves,  Price  of,  130,  146 

Coal,  Price  of,  n,  22,  117 

Cochineal,  Price  of,  172 

Coffee,  Price  of,  10,  172 

Coinage  of  England,  100,  116,  134 

Coinage  of  France,  98,  99,  175,  176 

Coinage  of  Xanten,  97 

Coins  of  Frankish  Monarchy,  37, 
90,  92 

Colbert,  192,  202,  288,  294,  301, 
302 

Colbert's  views  on  protection,  302 

Collars,  Cost  of  making,  244 

Cologne,  Money  of,  95,  97 

Cologne,  Trade  of,  212 

Colwell,  Stephen,  Ways  and  Means 
of  Payment,  64,  65 

Commodities,  Changing  character 
of,  107,  no 

Commodities,  Fall  and  rise  of,  9 

Comparisons,  Rules  for,  89 

Computation  of  fines,  37 

Confederate  issues,  4 

Continental  money,  4 

Convoys,  Armed,  56,  68 

•Copper  mining,  Declining  cost  and 
rising  wages  illustrated,  249,  250 

Copper,  Price  of,  10,  168 

Corroborating  proofs,  212 

Cost  of  carriage,  280,  285 

Cost  of  production  in  agriculture, 
271,  273 

•Cotton  and  wheat,  present  position 
analogous,  277 

Cotton  cloth,  Price  of,  10,  17,  23 

Cotton,  Improved  methods  of  rais- 
ing, 269,  270 

Cotton,  Price  of,  10,  13,  23,  172 

Cotton  prices  and  supply,  18,  270 

Cotton  spinning,  Cost  compared  of, 
230 

Cotton  yarn,  Price  of,  10,  17.  223 

Cows,  Price  of,  122 

Credit  money,  56-68 

Credulity  of  writers,  78 

Crops,  The  raising  of  certain,  com- 
pulsory, 273,  275 


D 


Dareste  de  la  Chavanne,  Histoire  des 
Classes  Agricoles  en  France,  185 

Davanzati,  Lezione  sulle  Motiete,  19 

D'Avenel,  G.,  Histoire  de  la  Pro- 
prie'te',  etc.,  174,  185,  194,  202, 
204,  278 

Dearth,  Prevalence  of  years  of,  198 

Debasement  of  coinage,  100,  143, 
176  - 

Decline  in  price  of  silver,  31,  51 

Del  Mar,  History  of  Money,  42 

Demonetization,  Effect  of,  on  prices, 
21 

Demonetization  of  silver,  8 

Demonetization  of  silver,  Cause  of, 
32 

Denier,  The,  38,  91,  204 

Depreciated  currency  and  competi- 
tion, 230,  239,  240 

Depreciated  money,  3 

Drafts  and  bills  of  exchange,  56, 
72,  90 

Dress  fabrics,  Effect  of  removing 
duties  on  raw  material  on  price 
of,  305-308 

Dutch,  Grasping  character  of  the, 
288,  289 

Dutch,  The,  as  traders,  288 

Dutch,  The,  East  India  Company, 
289-290 

Duties  and  taxes,  burdens  on  pro- 
duction, 300-306 


E 


Early  institution  of  drafts,  56 
Eastern  competition,    Fear   of,  un- 
grounded, 230—232 
Economist,  The,  8,  9,  162,  164 
Eden,    Sir  Frederic,    25,   no,   153, 

219,  220 
Eggs,  Price   of,  22,   123,    138,   160, 

210 
Elizabeth,  Coinage  reform  of,  101, 

"5 

Ellison,   The  Cotton  Trade,  224 
English  East  India  Company,  290 
English  farming,  273 
Erroneous  wage  views,  217 


INDEX. 


347 


Exaggerated  accounts  of  silver  pro- 
duction in  sixteenth  century,  78 
Exports  of  wheat  and  flour,  279 


Fall  River  and  Bolton  rates.  Com- 
parison of,  221 
Fall  River  and  Burnley,  Labor  cost, 

243 

Famine,  Frequency  of,  187 

Farnam,  Henry  W.,  Die  innere 
franzoesische  Geiverbepolilik,  296 

Fertilizers,  Effect  of,  on  cotton  rais- 
ing, 267-270 

Financial  history  of  England,    131, 

149.  I51 

Flax,  Price  of,  10 

Fleetwood,  Price  quotations  by,  116 
Flemings,  Influence  of,  on  England, 

no,  121,  136,  145 
Florence  and  the  florin,  40 
Florin,  Character  of  the,  40 
Fluctuations  in  wheat  prices  in  past 

periods,  278 

Forced  issues,  Nature  and  fate  of,  6 
Forty-to-one  bill,  The,  5 
Free  coinage  of  silver,  26 
Free  land  and  farming,  272 
Free  trade  and  prices,  163 
Fuggers,  The  wealth  of  the,  75 
Furnace  practice,  258,  259 


Geese,  Price  of,  122,  138 
Geiler  von  Keysersberg,  72 
Geld,  Meaning  of,  7 
Geometrical  theory  of  prices,  24 
German    and    English    labor   cost, 

226-228 

German  and  English  wages,  228 
Germany,    Decline  of,  in  sixteenth 

century,  211,  215 

Germany,  Price  records  of,  203,  211 
Germany's  trading  pre-eminence  in 

fifteenth  and  sixteenth  centuries, 

72-85 

Ginger,  Price  of,  130,  146 
Gold  coins  of  Saracens,  38,  40,  95 
Gold  deposits,  47 
Gold  mining,  Reduction  of  cost,  261 


Gold  mining,  Progress  in,  261 
Gold  production,  27-30,  46,  151 
Gold  standard,  Rule  of,  39 
Goldsmiths'  notes,  150 
Gold   the  standard   of    progressing 

nations,  256 

Grain,  Increasing  supply  of,  188 
Guanajuato,  Mines  of,  28,  49,  75 
Guilds  and  monopolies,  292-296 
Guinea,  The,  66 
Guyot,  Yves,  La  Science  Economiquc, 

215,  216 

H 

Hemp,  Price  of,  10 

Henry    VIII.,    Debasement   under, 

ioo,  115,  117 

High  prices  in  Middle  Ages,  74,  102 
Hoards  in  plate,  78 
Horses,  Price  of,  103,  104,  122,  138 
Humboldt,  Alex,  von,  Essai  Poli- 

tique  sur  la  Nouvelle  Espagne,  27, 

50,  76,  77 
Hume,  David,  20,  81,  121,  132,  137, 

145,  288,  301 
Hundred  Years'  War,  Influence  of, 

1 80 


Imports  and  exports,  135,  183 
Inama-Sternegg,    Deutsche    Wirth- 

schaftsgeschichte,   37,    43,  91,   95, 

IOO 

Index  numbers  considered,  13 
Index    numbers,     Unreliability   of, 

238 

India,  Competition  of,  230 
India  cotton  and  silver  relation,  17 
Indigo,  Price  of,  10,  172 
Individual  rights,  295 
Industry  of  England,  State  of,  127 
Intellect,  The  rise  of  the,  and  wages, 

225 
Ireland   and   England,    Contrasting 

wages  of,  234 
Iron,  Bar,  Price  of,  13,  23,  124,  126, 

141,  168 

Iron,  Fluctuations  in,  23,  257 
Iron  law  of  wages.  Fallacy  of,  217 
Iron,  Pig,  Price  of,  10,  13,  23,   124, 

126,  141,  168,  200,  256,  257 


348 


INDEX. 


Janssen,  Joh.,    Geschichte  des  deut- 

schen  Volkes.  35,  73,  78 
Jews,  The,  and   credit  money,  56— 

53 

Jews,  The,  and  trade,  72,  90 
Jews,  The,  as  preservers  of  methods 

of  civilization,  56-58,  72,  90 


K 


Kipper  and  Wipper,  The,  in  Ger- 
many, 131 

Krupp,  wage  rates  contrasted,  239, 
3i8,  319 


Labor  cost  and  wages,  216-219,  224, 

225,  227,  233,  241,  243 
Labor  cost,    German   and   English, 

226-228 

Laborer,  Wages  of,  142,  216 
Labor  product  and  wages,  219,  225, 

241 

Land  in  common,  35,  36 
Lard,  Price  of,  22.  123 
Laveleye,  Emile  de,  De  la  Propriety 

et  de  ses  formes  primitives,  35 
Lead,  Price  of,   10,  141,   168,  200, 

209 

Leather,  Price  of,  10,  23 
Levasseur,  Emile,  174,  177 
Levi,  Leone,   Wages  and  Earnings, 

106,  162-164 

Lime,  Price  of ,  124,  141,  209 
Linen,  Price  of ,  128,  144,  169,  211 
Livre  tournois,  The,  98,  99,  175 
Locke,  John,  19,  189 
Low  cost  of  labor  and  high  wages, 

216-253 
Low   earnings  and  high  cost  labor, 

216-253 
Low  wages  in  competition,  239,  241, 

243 

M 

Macaulay,  History  of  England,  143, 

149,  150,  287 

Maccann,  Argentine  Republic,  107 
Maine,  Sir  Henry,  35 


Malt,  Price  of,  119,  135 

Markets,     Opening      of,     affecting 

prices,   160,  275 
Mark  of  Cologne,  The,  95,  97 
Mark  of  Xanten,  The,  96,  97,  204, 

3i8 
Masons,    Wages  of,  125,   142,   158, 

196,  216,  236,  313,  314 
Meadow  land,  Price  of,  178 
Meals,  Price  of,  182,  183,  195 
Meat,  Price  of,  10 
Metallurgy,  Progress  in,  247,  262 
Middle  Ages,    High  prices  in,  74, 

IO2 

Mining,  Progress  in,  248,  261,  262 
Mining,    Risks   not    preventive   of, 

47,  54 

Mints,  Closing  to  silver  of,  8 
Molinari,  G.  de,  Cours  d'Economit 

Politique,  98,  99 
Money,  Cattle  as,  35-37 
Money  economy,  84,  88 
Money,  Meaning  of,  7 
Money  of  account,  63-68 
Money   payments,  Infrequency   of, 

6 1 
Money  supply  and  prices,  7,  8,  19, 

25,  151,  184,  201 
Monks,  Medieval,  transfers  through, 

56 

Monopolies  and  privileges,  72 
Montanari,  Delia  Moneta,  19 
Montesquieu,  Theory  on  Money  19, 
Moreau   de  Jonnes,     Etat     Econo- 

mique,  etc.,  184,  186,  189,  201 
Mulhall,  Michael,  G.  index  numbers, 


X 


Nail  making,  Labor  cost  and  wages 

in,  252 

Nails,  Price  of,  22,  124,  141,  209 
Nuebling,  Eugen,  Ulm's  Baumivoll- 

industrie,  297 
Nuremberg,    Leading    position    of, 

73,  85 

O 

Oats,  Price  of,   119,   135,   157,  153, 

182,  104 

Oils,  Price  of,  10 
Oxen,  Price  of,  122,  138 


INDEX. 


349 


Painter,  Wages  of,  196 
Patriotism,  ineffectual,  When,  6 
Payment   by  weight  of  silver,  Rule 

of,  113-116,  176 
Payments  by  accounts,  64 
Peas,  Price  of,  119,  135 
Pepper,  Price  of ,  74,  130,  146 
Phoenician  traders  and  exchange,  58 
Piccolomini,  Aeneas  Sylvio,  78 
Piece    workers,    Proportion    of,    in 

factories,  246 

Plague,  Change  of  conditions  follow- 
ing the  great,  118 
Plasterer,  Wages  of,  196 
Plate  as  hoard  and  money,  78 
Plumbers,  Wages  of  125,  142,  158 
Poor,  Effect  of  high  prices  on  the 

fate  of  the,  155,  158 
Pork,  Price  of,  22,  139,  210 
Potosi,  Mines  of,  28,  49,  75 
Price  and  supply,  18,  210 
Price  comparisons,  22 
Price  decline  and   money   increase, 

171,  201 

Price  variations,  10,  108 
Prices  and  money  supply,  87,  151 
Prices  and   transportation  facilities, 

159,  278,  284 
Prices  and  wages,  16,  125,  143,  157, 

208 

Prices  expressed  in  wheat,  104 
Prices  of 

Animals,  108,  122 

Bacon,  22 

Barley,  119,   135,    153,   157,  182, 
194,  205,  206,  311 

Beans,  119,  135 

Beef,  10,  22,  106,  138,  162,  210 

Boars,  122,  138 

Bread,  106,  157,  183,  195 

Bricks,  124,  141,  209 

Butter,   22,    103,    123,    138,    160, 
164 

Candles,  124,  141 

Cheese,  22,  103,  123,  138,  164 

Chickens,  210 

Cinnamon,  130,  146,  170 

Cloth,  128,  169,  200,   201 

Cloves,  130,  146 

Coal,  ii,  22,  117 


Prices  of 

Cochineal,  10,  13,  23,  172 

Coffee,  10,  172 

Copper,  10,  168  0 

Cotton,  10,  17 

Cotton  cloth,  10,  17,  23 

Cotton  yarn,  10,  17,   123 

Cows,  122 

Eggs,  22,  123,  138,  160,  210 

Flax,  10 

Geese,  122,  138 

Hemp,  10 

Indigo,  10,  172 

Iron,  Bar,  13,  23,   124,   126,   141, 

1 68 
Iron,   Pig,   10,  13,  23,   124,   126, 

141,  168,  200,  256,  257 
Lard,  22,  123 

Lead,  10,  141,  168,  200,  209 
Leather,  10,  23 
Lime,  124,  141,  209 
Linen,  128^  144,  169,  211 
Malt,  119,  135 
Meals,  182,  183,  195 
Meat,  10 

Oats,  119,  135,  153,  157,  182,  194 
Oils,  10 
Oxen,  122,  138 
Peas,  22,  139,  310 
Pepper,  74,  130,  146 
Pork,  22,  139,  210 
Rails,  Iron,  22 
Rails,  Steel,  22,  264 
Rice,  130,  170 
Rope,  124,  141 

Rye,  119,  135,  194,  317,  321,  322 
Salt,  124,  141 
Saltpetre,  172 
Sheep,  122,  138 
Silk,  10,  172 
Silver,  10 
Slate,  209 
Starch,  22,  138 
Sugar,  10,  72,  74,   130,  146,  147, 

170 

Tallow,  10,  138 
Tar,  124,  141 
Tea,  10,  172 
Tiles,  124,  141,  209 
Timber,  10 
Tin,  10 
Tobacco,   10,  13,  23 


350 


INDEX. 


Prices  of 

Wax,  123,  209 

Wheat,  10,  20,  22,  116,  119,  135, 
153,  157,  159,  183,  194,  205, 
206,  277,  278,  311,  320-322 

WTheat  flour,  22 

Wool,  10,  20,  123,  138,  165,  166, 
167,  200 

Yarn,  10,  17,  223 
Privileges  and  monopolies,  72 
Product,    Annual,    of    the  .  United 

Stajes,  21 

Production  of  gold,  27-30,  46,  151 
Production  of  silver,  27-30,  46,  151 
Profit  rate  in  past  periods,  287 
Progress  in  mining,  261 
Protective  duties  and  prices,  303-305 
Protective  tariff  injurious,  301 


Quantity  relation  of  silver  to  gold, 

3.2 
Quincy,    Josiah,     views    on     paper 

money   5 

R 

Rails,  Iron,  Price  of,  22 
Rails,  Steel,  Price  of,  22,  264 
Ratio  and  production,  28,  29 
Ratio  of  silver  to  gold,  43,  44,  203 
Raw   materials    and   manufactures, 

157 

Raw  materials,  Taxes  on,  301 
Reduction  of  weight  in  coinage,  93, 

113,  205 
Regulation  of   trade   by   the   state, 

296-299 
Reichsmark,  Relation  of,  to  money 

of  Middle  Ages,  205,  206 
Rem,  Lucas,  Diary  of,  73,  75 
Resumption  of  specie  payments  and 

prices,  22 

Revenue  from  land,  178 
Rhenish  gold  florin,  The,  95,  97 
Ricardo,  Erroneous  views  of,  218 
Rice,  Price  of,  130,  170 
Rising  prices  in  fifteenth   century, 

74,  84 
Rising  wages  and  declining  prices  as 

incidents  of  progress,  254,  255 
Risks  of  commerce  in  the  past,  285 
Ritter,  E.,  Erdkunde,  287 


River  navigation,  Charges  on,  300 
Roads,  Roman,  in  England,  282 
Rogers,  John  Thorokl,  43,  55,  80, 

loo,  in,  113-147,  153,   155,  282, 

283,  289,  307 
Rope,  Price  of,  124,  141 
Roscoe,  History  of  Lorenzo  il  Mag- 

nifico,  85 

Russia,  Report  on  agriculture,  235 
Russia,  Wages  in,  235 
Rye,  Price  of,   119,   135,  194,  317 

319,  321,  322 


Saddlers,  Wages  of,  125 

Salt,  Price  of,  124,  141 

Saltpetre,  Price  of,  172 

Saracens,  Gold  coins  of  the,  38,  40, 
95 

Saracens,  Influence  of,  on  Middle 
Ages,  89 

Sauerbeck,  index  numbers,  9,  15 

Saunois  de  Chevert,  L  Indigence, 
etc.,  185 

Savary,  Dictionnaire  de  Commerce, 
297 

Sawyers,  Wages  of,  125,  142 

Say,  J.  B.,  Trait^  fEconomie  Po- 
litique,  216 

Schmoller,  G.,  Die  Strassburger 
Tucker-  utid  Weber zunft,  in, 
298,  316 

Schneider,  Heer-  und  Handelswege 
der  Roemer,  36 

Schoenhof,  J.,  Consular  Reports, 
106,  225,  242 

Schoenhof,  J.,  The  Destructive  In- 
fluence of  the  Tariff,  127 

Schoenhof,  J.,  The  Economy  of 
High  Wages,  225,  304 

Schoenhof,  J.,  The  Industrial  Situ- 
ation, 21,  233 

Schoenhof,  J.,  Report  on  Technical 
Education,  242 

Schultze-Gaevernitz,  Der  Grossbe- 
trieb,  225,  226,  241,  242 

Science  applied  to  industry,  258 

Settlements  at  fairs,  59 

Shaw,  W.  A.,  The  History  of  Cur- 
rency, 43 

Sheep,  Increase  of,  107 


INDEX. 


351 


Sheep,  Price  of,  122,  138 

Shirts,  Cost  of  making,    in   Berlin 

and  in  New  York,  245 
Shoemaking  by  machinery,  253 
Silk,  Price  of,  10,  172 
Silver,  Changing  relations  of,  42,  43, 

44.  203 

Silver,  Closing  of  mints  to,  8 
Silver,  Decline  in  price  of,  31,  51 
Silver,  Demonetization  of,  32 
Silver,  Free  Coinage  of,  26 
Silver,  Low  cost  of  production,  51 
Silver,  Production  of,  27-30,  151 
Silver,  Price  of,  10 
Silver,  Quantity  relation  of,  32 
Silver,  Ratio  of,  to  gold,  28,  29,  43, 

44,  203 
Singer,    Dr.  I.,    Die  Baumwoll-in- 

dustrie  in  Boehmen,  233 
Sismondi,  Histoire  des  Rtpubliques 

Itatiennes  dans  les  Moyens  Ages, 

85,  99 

Slate,  Price  of,  209 
Smith.  Adam,  Grain  prices,  25,  105 
Smuggling,  Prevalence  of,  183 
Soetbeer,  Dr.  Adolf,  9,  48,  63,  75, 

73 

Solidus,  The,  38,  91,  204 
Southern   produce,   Prices  of,    130, 

146,  170 

Spinners'  wages,  219-224 
Spinning  cost  and  wages,  219-221, 

224,  226 
Spinning,    Piece    rates    and    wages 

compared  in,  221 
Standard  of  value,  35,  38 
Standard,  Change  of,  100,  116 
Starch,  Price  of,  22,  138 
Statistical  Society,  Numbers  of,  8, 

13,  162,  164 

Steel  Mills  in  America,  263 
Stonecutters,  Wages  of,  216 
Stucco-workers,  Wages  of,  216 
Sugar,   Price  of,  10,  22,   130,   146, 

147,  170,  174 

Summary  of  price  history,  311—323 
Supply  and  prices,  18,  270 


Tacitus,  Gfrmania,  42 
Tallow,  Price  of,  10,  138 


Tar,  Price  of,  124,  141 

Taxation  and  prices,  186,  191 

Tea,  Price  of,  10,  172 

Tennessee  Coal  and  Iron  Company's 

cost  of  making  iron,  257 
Textile  industry,  State  of,  127,  137, 

145,  158,  201,  298 
Thatchers,  Wages  of,  125,  142 
Theory     of     money    quantity     and 

prices,  19,  21,  25,  184,  201 
Thirty  Years'  War,  71 
Thirty  Years'  War  and  prices,  187 
Thun,  Alfons,  Landu'irthschaft  und 

Kleingeiverbe  in  Mittel-Russlandt 

235 

Tiles,  Price  of,  124,  141,  207,  209 
Tilers,  Wages  of,  125,  141 
Timber,  Price,  of,  10 
Tin,  Price  of,  10 
Tobacco,  Price  of,  10,  13,  23 
Tolls,  300 
Tooke,    Thos.,    History  of  Prices, 

24,  25,  no,  153,  157,  166,   173, 

257 

Trade  follows  sound  money,  65 
Trading  risk,  62 
Truck  farming,  267,  268 
Turgot,  Reforms  of,  293 


Vauban,  La  Dime  Royale,  192,  193. 
Venice,  Bank  of,  63-65 
Vineyards,  Price  of,  178 
Vintners,  Wages  of,  196 

W 

Wage  rate  by  the  piece,  145,  217, 

221,  241,  243 
Wages  and  labor  cost,  216-219,  224, 

225,  229,  233,  241,  243 
Wages  and  prices,  16,  125,  143,  157, 

208 

Wages  expressed  in  flour,  223 
Wages  expressed  in  grain,  311-325 
Wages  of 

Agricultural  laborer,  196 

Blacksmith,  216 

Bricklayer,  125,  142,  158 

Carpenter,    125,    142,    158,    196, 
206,  216,  236,  312-314 


352 


INDEX. 


"Wages  of 

Laborer,  142,  162 

Mason,   125,   142,  158,   196,   236, 
.       312-314 

Painter,  196 

Plasterer,  196 

Plumber,  125,  142,  158 

Saddler,  125 

Sawyer,  125,  142 

Spinner,  219,  220-224 

Stonecutter,  216 

Stucco-worker,  216 
•  Thatcher,  125,  142 

Tiler,  125,  142 

Vintner,  196 

Wages,  Rising  tendency  of,  16,  220 
War   periods  and  prices,    156-159, 

180-193,  207 
Wasteful  methods  in  silver  mining, 

50 

Waste,  Recovery  of,  264 
Watchmaking  by  machinery,  252 
Wax,  Price  of,  123,  209 
Webster,    Daniel,   views  on   paper 

money,  7 

Wheat  flour,  Price  of,  22 
Wheat,  Price  of,  10,  20,  22,  116,  119, 

135,  153,  157,  159,  183.  IQ4,  205, 

206,  277,  278,  311,  320,  322 


Wheat  raising  as  a  money  crop,  275 
Whitwater  Strand  gold  mines,  33,  45 
Wool,  Price  of,  10,  20,  123,  138, 

165-167,  200 
Wool  supply  and  prices,   166,   167, 

201 

Woollen    manufacturers    and    pro- 
tective tariffs,  302-306 
Wright,    Carroll    D.,    Labor    cost, 
Statements  of,  251 


X 


Xanten,  Record  of  prices,  80,  203- 
212,  311,  314,  317 


Yarn,  Character  of,  no 
Yarn,  Price  of,  10,  17,  223 
Young,  Arthur,  24,   157,  165,   201, 
218 


Zecchino  d'or,  as  money  of  account, 

63 

Zimmermann,  Win.,   Geschichte  des 
grossen  Bauernkriegs,  74 


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AUTHOR    INDEX    TO    THE 
"OCKSTIONS    OF    THE    DAY"    SERIES. 


Alexander,  E.  P.,  No.  36 
Allen,  J.  H.,  No.  53 
Atkinson,  E.,  No.  40 
Bagehot,  W.,  No.  28 
Baker,  C.  W.,  No.  59 
Blair,  L.  H.,  No.  35 
Bonham,  J.  M.,  No.  61 
Bourne,  E.  <  r.,  No.  24 
Bowker,  R.  R.,  No.  ID 
Bruce,  P.  A.,  No.  57 
Cleveland,  G.,  No.  48 
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